The Reserve Bank of India (RBI) on Friday allowed all the banks to hold EMIs for a period of 3 months. The development has come as the government's relief measures amid coronavirus lockdown in the country which has affected business and may lead to economic slowdown both national and globally. The RBI has also reduced repo rate by a massive 75 basis points to 4.4 per cent and reverse repo rate by 90 basis points to 4 per cent as coronavirus relief package.
RBI puts a pause on EMIs for 3 months in fight against COVID-19 | What you should know
- RBI has allowed all the banks that if they want then can pause on collecting EMIs for all types of term loans for a period of three months be it house laons, car loans or other loans.
- The onus will now be on banks whether to further extend the relief to its customers by suspending EMIs or installments.
- People who may face liquidity shortage amid COVID-19 outbreak but have EMIs to pay may appeal to banks requesting to suspend their installments upto a period of 3 months. However, finally, it will be on the bank whether to allow it or not.
- All commercial banks including regional rural banks, cooperative banks,NBFCs (including housing finance companies) & lending institutions are being permitted to allow a moratorium of 3 months on payment of installments in respect of all term loans outstanding as on March 1.
- All retail loans including EMIs are also covered under the 3-month (April, May and June) moratorium.
- All retail loans including EMIs on home loans, personal loans, car loans, education loans, loans for mobile, tv, fridge are also covered by the 90-day moratorium.
RBI's pause on EMIs not a waiver for installments
People should know that RBI's announcement allowing banks to pause the collection of EMIs for all term loans for a period of 3 months is not a waiver on installments. If banks allow, it will just be a temporary relief for 3 months, therefore, it's going to be a deferment.
RBI's 3-month moratorium on EMIs will include both installment and interest
If banks take decisions to pause EMIs collection as announced by RBI for a period of 3 months, then it will include both the installment and interest paid by a borrower.
Will credit card payments also come under RBI's moratorium
RBI said that all term loans will be covered under this relief, since credit card payments are not considered as term loans, therefore, these payments will not be deferred.