The Reserve Bank of India (RBI) has allowed all financial institutions to allow a 3 month moratorium for all term loans in light of the COVID-19. RBI COVID-19 relief on loans is that the banks can now allow their customers for a 3-month period to not pay their monthly EMIs, and further the non-repayment will not effect their credit score.
Some of the question which is answered are:-


 Q1: If  EMI is due soon. Now whether the payment will not be deducted from the account holder account?
Ans: The RBI has only allowed banks to allow a moratorium. So the account holder has to take specific approval from bank. Individual banks will have to allow suspension of EMIs. This means EMIs will still be deducted from the account if you haven’t taken specific approval.

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 Q2: What will be process of work at bank level?
Ans: All banks has to get their decision approved at the board level and will have to discuss the moratorium. Once approved, they may reach out to customers informing them of the moratorium.
Q3: Will non payment will impact the credit score if the bank suspends EMIs?
Ans: No. It will not.
 Q4:Which banks can offer this deferment to their customers?
Ans: All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) included.
Q5:Is this a deferment of EMIs a waiver of EMIs or?
Ans: This is not a waiver, but a deferment. The accumulated interest and principal as decided later shall be paid to the bank. Further RBI has recommended that the repayment schedule and all subsequent due dates as also the tenor for such loans may be shifted by 3 months.
Q6: Does the moratorium cover both principal and interest?
Ans: Yes. It does. If announced by your bank, you will be exempt from payment of your entire EMI, including payment and interest for three months. This will be applicable on all loans outstanding as on March 1, 2020.
Q7:What kind of loans does the moratorium cover?

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Ans: The RBI policy statement mentions term loans, which includes home loans, personal loans, education loans, auto  and any loans which have a fixed tenure. The also include consumer durable loans, such as EMIs on mobiles, fridge, TV etc
 Q8: Does the moratorium cover credit card payments ?
A: Since credit cards are revolving credit and not term loans, they are not covered under the moratorium.
 Q9: If a person have taken a project loan for setting up a factory. Can he not pay my EMI?
Ans: The moratorium has been allowed on any loan classified as term loans. If the bank is convinced that the person are not in a position to pay the EMIs, he will get a deferment.
 Q10: What relief has  RBI announced for businesses?
Ans: The RBI has allowed deferment for interest for all working capital loans taken by businesses. This will be applicable in respect of all working capital facilities outstanding as on March 1, 2020. The accumulated interest for the period will have to be paid after the expiry of the deferment period. There will be no change in terms and conditions of loan agreements and this will not result in asset classification downgrade.

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