New Delhi: The Reserve Bank of India on Friday announced a three-month moratorium for EMIs on all outstanding loans in wake of the coronavirus crisis and consequent lockdown in the country..
“All commercial, regional, rural, NBFCs and small finance banks are being permitted to allow 3-month moratorium on payment of instalments in respect of all term loan EMIs outstanding on March 31,” an RBI statement said.
This means that for the next three months, no EMI would be deducted from the account of anyone who has a loan outstanding. And all this without any hit on credit score. EMIs will resume after the moratorium period gets over.
This is going to be a huge relief for all EMI payers, especially for those — such as the self-employed — whose income had become uncertain in the wake of the lockdown.
The 3-month moratorium will apply to corporate loans, home loans, car loans and personal loans. However, credit card dues won’t be part of this moratorium as it’s not a term loan.
The RBI clarified that the deferment of interest payment would not result in asset classification downgrade.
RBI Governor Shaktikanta Das also assured people not to worry about their deposits as “your money is safe”. He also advised people not to “resort to the panic withdrawal of deposits from private banks”.
RBI also decided to reduce the repo rate by 75 basis points to 4.4 per cent, calling the current times “extraordinary circumstances”. The move will reduce interest on loans and help boost the economy.
However, reduced repo rates indicate the interest earned on fixed deposits may also fall further.
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