No absolute clarity on EMIs

Tribune News Service

New Delhi, March 31

Led by the State Bank of India, all public sector banks, though, formally informed their customers about the three-month deferment on all types of loans today, clarity is not there if customers in each case are required to inform their banks for taking the benefit.

The RBI has made it clear that the moratorium will include principal and/or interest components, bullet repayments, EMIs and credit card dues.

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.

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 messages to borrowers, credit card holders and mutual fund investors asking them to maintain sufficient balance on the date of deduction of EMI or credit card dues.

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 three per cent reduction.

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.

Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.