All loans, credit card dues covered under 3 months moratorium: RBI

Issuing the detailed instructions on the moratorium announcement later in the day, the RBI said, "The instalments include payments falling due from March 1 to May 31 such as the principal and/or interest components; bullet repayments; equated monthly instalments; and credit card dues."

Mumbai: The moratorium on loan repayment between March 31 and May 31, is applicable on all types of retail credit, including credit card outstanding balances, the Reserve Bank said on Friday.

"To mitigate the burden of debt servicing brought about by disruptions due to the Covid pandemic and to ensure the continuity of viable businesses", the RBI has announced a three-month moratorium on all payments, including retail loans and credit card balances apart from corporate loans.

Issuing the detailed instructions on the moratorium announcement later in the day, the RBI said, "The instalments include payments falling due from March 1 to May 31 such as the principal and/or interest components; bullet repayments; equated monthly instalments; and credit card dues."

It also said 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.

Term loans and working capital facilities include all term loans (including agricultural term loans, retail and crop loans), all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India financial institutions, and NBFCs (including housing finance companies) are permitted to grant a moratorium of three months on payment.

In respect of working capital facilities sanctioned in the form of cash credit/overdraft, lenders are permitted to defer the recovery of interest applied in respect of all such facilities during the deferment period.

"But the accumulated accrued interest shall be recovered immediately after the completion of this period," the RBI said.

In regard to working capital facilities to borrowers facing stress on account of the economic fallout of the pandemic, lenders may "recalculate the drawing power by reducing the margins and/or by reassessing the working capital cycle."

But the relief shall be available for all such changes effected up to May 31, and shall be contingent on the lending institutions satisfying themselves that the same is necessitated on account of the economic fallout from the pandemic.

(PTI Report)