Following the Reserve Bank of India directive to banks on 27 March to provide a three-month moratorium on repayment of term loans.
New Delhi| In a big relief to customers amid coronavirus crisis, the country’s major private sector banks have activated loan repayment moratorium option.
In a statement, the SBI, India’s largest lender, had said that the customers who want to avail the moratorium need to send an email to avail the options. For the customers who do not want to avail the moratorium option, the bank had said, “No action is required. They may continue to pay in the usual course.”
Along with SBI, ICICI Bank and HDFC Bank have also activated moratorium options in their respective websites. The moratorium is for payment of all instalments falling due between March 1, 2020, and May 31, 2020. The announcement will bring relief to all borrowers, including those who have home loans, auto loans, education loans, agricultural term loans, retail and crop loans to their names.
“In line with RBI’s Covid19 relief package, ICICI Bank offers its customers a choice of either paying towards their loans/credit facilities or opting for a moratorium till May 31, 2020,” ICICI Bank said in a tweet.
The countries’ biggest lender, State Bank of India, tweeted “In terms of RBI COVID19 regulatory package, SBI has initiated steps to defer the instalments and interest/EMIs on term loans falling due between 1 March 2020 to 31 May 2020 and extended the repayment period by three months.”
Union Bank of India Managing Director Rajkiran Rai G said that branches have been informed about with respect to the moratorium on all term loans.
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As per the RBI notification, there will be no impact on the credit score of the borrowers for availing the moratorium facility.
As different banks are following different methods, both who want to avail the facility and those who don’t want to avail the facility should connect with their respective banks for clarity. Check your bank’s website for details or connect through email or phone for clarity.
As per RBI’s notification, SBI has further clarified to its customers that the interest will continue to accrue over the moratorium period and it will increase the cost. SBI has explained it with an example on its website. For a borrower with a loan amount of ₹30 lakh with a remaining maturity of 15 years, the net additional interest would be around ₹2.34 lakh (equal to 8 EMIs) if a person opts for the moratorium. SBI is currently charging an interest of 7.20% for a ₹30 lakh loan.
The cost will be recovered post three month period, so you will end up paying higher EMIs. You will have to connect with your bank for the revised repayment schedule which will show you your revised EMIs.
(Input from Agencies)
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