The repayment schedule for such loans will shift by 3 months after the moratorium period and it includes all principal and interest payments. The interest for this period will continue to accrue on the outstanding portion of credit card dues as well as term loans during the moratorium period.
After the RBI gave borrowers, account holders, and credit card holders a one-time opportunity to re-schedule their payments, most banks have started offering to defer their EMIs and credit card payments in the wake of the coronavirus pandemic.
According to the RBI, borrowers, account holders, and credit card holders of all Indian banks and Indian financial institutions can hold on to their payments by way of the moratorium for 3 months on payment of all term loan installments and credit card dues which are falling due between March 1, 2020, and May 31, 2020.
The repayment schedule for such loans will shift by 3 months after the moratorium period and it includes all principal and interest payments, credit card dues, EMIs, and bullet repayments. Note that, the interest for this period will continue to accrue on the outstanding portion of credit card dues as well as term loans during the moratorium period.
Most banks have started informing their customers and passing on this EMI moratorium as a relief measure. Banks have started sending emails and text messages to their customers in line with the RBI guidelines. Experts, however, suggest, if an individual can pay up their dues on time during this lockdown, then he/she should do that and not avail the 3-months moratorium. Therefore, borrowers who might not be struggling with their repayments should try to pay off their dues on time, as the interest for the 3-month moratorium period will continue to accrue on the outstanding portion of loans or on credit card dues.
Other than large banks like SBI, HDFC and ICICI, other banks such as Axis Bank, IDFC First Bank, IndusInd Bank, Kotak Mahindra Bank, IDBI Bank, Bank of Baroda, Punjab National Bank, Canara Bank, Syndicate Bank, Oriental Bank of Commerce, United Bank of India, Union Bank of India, Andhra Bank and Corporation Bank have also extended the moratorium relief to their customers.
How can you get the EMI/credit card moratorium?
SBI offers a complete moratorium on all term loan repayments. Customers have been informed through email and phone calls about the specifics of the moratorium and how it would impact their repayment schedule and their interest cost.
SBI has offered its customers the option to ‘opt-in’ for the moratorium facility offered by it, wherein customers/ borrowers who want to avail the moratorium will have to inform the bank. Customers who want to avail the moratorium needs to fill up a form (an application) and send it to the bank through an email. You can get the form by visiting the bank website and send it to the email ID allotted as per your region. SBI has notified that if borrowers and cardholders don’t want to avail the moratorium, no action is required from their end.
ICICI Bank customers can opt for the moratorium by visiting the bank’s website to specify their choices. Customers can also opt for the moratorium by clicking on the link shared with them by the bank through SMS or email.
The bank has made it clear that borrowers will have to pay the interest accrued at the end of the 3-month period. This bank has also notified that the change in the tenure might increase the interest cost for the customer.
Even though the bank has said that all its retail customers would be eligible for the moratorium, this is a voluntary benefit that will be offered to the customers. Customers who do not want to opt for the moratorium, need not take any action and their installments would be debited from their accounts. For customers who have more than one loan from the bank, they have to apply for a moratorium for each of these accounts. Even though corporate and SME borrowers are also eligible for the moratorium, the bank has notified that it would take a decision for each case separately.
HDFC Bank customers can provide their consent to the bank through either phone call or submitting their requests by filling up a form. HDFC Bank customers can either call the customer care numbers and follow the instructions, or can also visit the website and submit their request.
IDBI Bank has also offered its customers the 3-month moratorium on repayment of loans. The bank has extended this relief for borrowers impacted due to COVID 19 for 3 months, on term loan installments, interest, and deferment of interest on working capital loans of borrowers accounts. People whose cash flows are not impacted and want to continue payments can also do so.
IDBI Bank has offered its customers the option to ‘opt-out’ from the moratorium facility offered by the bank, wherein, customers/borrowers who don’t want the moratorium will have to email the bank by 3 April.
Kotak Mahindra bank
Customers of Kotak Bank need to send a mail to the bank if they want to opt for the relief and have to quote their loan account number, within 7 days of the installment falling due. Kotak Bank has offered its customers the option to ‘opt-in’ for the moratorium facility offered by the bank. To do so, borrowers/credit cardholders will have to inform the bank by writing an email to the bank for ‘opting in’ for the moratorium.
Also, if borrowers have already paid their EMI or serviced their interest for the month of March 2020, those borrowers can avail moratorium for loan installments falling due in April and May 2020.
The bank on its twitter handle has said that borrowers will be eligible for moratorium or deferment of installments, EMI for term loans that is falling due from 1st of March’2020 to 31st May’2020. The repayment period will also get extended accordingly.
Canara Bank has asked its customers to send a ‘NO’ to the number to opt-out from the moratorium facility offered by the bank. Additionally, Canara Bank customers can also mail their choice with their details to the bank’s email ID.
Axis Bank customers who do not want to avail the moratorium,
can ‘opt-out’ from the moratorium by sending an email or getting in touch with any of the bank branches. Borrowers will automatically be included in the moratorium if they have not sent any written communication stating otherwise.