Coronavirus lockdown: Top banks announce 3-month EMI moratorium for customers

Coronavirus lockdown: Top banks announce 3-month EMI moratorium for customers

Coronavirus lockdown: Top banks announce 3-month EMI moratorium for customers

In a big relief to customers amid coronavirus crisis, country’s major private sector banks have activated loan repayment moratorium option. This is in accordance with the Reserve Bank (RBI) order wherein it had directed all financial institutions, including banks and housing finance companies, to give a three-month exemption to their creditors on payment of term loan installments. The order came in view of the financial stress faced by borrowers caused by lockdown due to novel coronavirus pandemic.

Many state-owned banks like State Bank of India, Bank of Baroda, IDBI Bank, Canara Bank had announced Moratorium for their customers on Tuesday.

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 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. 

What will happen if you choose Moratorium?

The RBI has instructed banks to give borrowers a grace period of 3 months (March, April, May) for payment of EMIs. However, this does not mean that three months’ EMI have been waived.  

If you opt for Moratorium, the bank will not ask you to pay EMI till 31 May 2020. At the same time, the interest on the total outstanding balance will be charged at the same rate at which you have taken the loan later on.

(This is an unedited and auto-generated story and may not have modified or edited by Quickclarity news)

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