Banks notify EMI moratorium after RBI directive, but doubts remain

Tribune News Service

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New Delhi, March 31

Led by the State Bank of India, all public sector banks on Tuesday formally informed their customers about the three-month deferment on all types of loans.

The Agriculture Ministry has already announced that farmers will continue to get short-term loan of up to Rs 3 lakh at a subsidised interest rate of 7 per cent, and timely repayment will be incentivised with a 3 per cent reduction.

But there were teething problems as in the absence of formal board meetings to stamp the RBI directive taken last week-end, many banks automatically sent SMSes to borrowers, credit cardholders and mutual fund investors asking them to maintain sufficient balance on the date of deduction of EMI or credit card dues.

The RBI has made it clear that the moratorium will include principal and/or interest components, bullet repayments, EMIs and credit card dues. However, what is not clear is whether customers in each case will have to inform their banks that they want to avail the benefit of the moratorium.

According to the brokerage firm Emkay, end-borrowers will not get a blanket deferment of payments. “The borrowers opting for deferment will either have to extend their tenure or increase the quantum of EMIs to compensate for the revenue loss,” it said.

A banker said such issues can be tackled in the coming days; what matters is that all sections of borrowers are eligible for across-the-board relief. Banks have already started sending customers messages on their registered mobile number about the deferment of EMI payments. But if customers opt for the three-month moratorium on loan repayments, then their EMI tenure or the amount will be appropriately increased with bankers reiterating that three-month deferment is not a loan write-off.

The RBI has made it clear that the “the repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period”.