COVID-19 pandemic: RBI permits banks to allow 3-month moratorium on EMIs

NEW DELHI: In a major relief to auto and home loan borrowers, the RBI on Friday permitted lenders, including banks and NBFCs, the power to impose a three-month moratorium on EMIs of borrowers on loans that they have disbursed.

RBI Governor Shaktikanta Das said on Friday: “All commercial banks (including regional rural banks, small finance banks and local area banks), cooperative banks, all-India financial institutions, and NBFCs (including housing finance companies and micro-finance institutions) are being permitted to allow a moratorium of three months on payment of installments in respect of all term loans outstanding as on March 1, 2020.”

In financial parlance, term loans includes home, personal, education, auto and any loans that have a fixed tenure. Effectively, all term loans should be outstanding as of March 1, 2020 to get the three-month moratorium.

Beside the moratorium, the MPC of the RBI voted to massively reduce the key lending rates, thereby, further lowering the EMI burden on borrowers. (IANS)

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