Clearing All Doubts Over EMI Moratorium Announced By RBI (Must Read FAQ)
Whether It will result into moratorium of Three EMI or Two EMI
As per our Understanding, it will result into moratorium of Two EMI. Reason is that Detailed Notification of RBI says there is moratorium on EMI falling due between 1st March, 2020 to 31st May, 2020.
EMI generally became due in first week of the month, so March EMI might have already paid by the people. So only 2 EMI cycle would be covered in the time period specified by RBI (One which falls due in first week of April and second which falls due in first week of May).
What Type of Loans be Covered under the Scheme
As per Notification Term Loans which have fixed tenure have been covered. It will include loans like car Loan, Home Loan, personal Loan etc.
Whether there will be moratorium on Credit Card Payment
Yes, though it is not term loan, Notification specifically covers the same.
Whether credit Card EMI will be covered for purchase of Mobiles, TV, Fridge etc through Amazon/Flipkart
Yes, as these are retail loans having fixed tenure.
Whether it is waiver or moratorium
It is moratorium not the waiver so customer will not get any relief in terms of discount of interest or principal. It is just like credit facility provided by Bank for three months at same rate of interest. So it will just change the re-payment schedule of customers.
Whether interest is payable for these three months by Customer
Yes, interest is payable for these three months on outstanding balance. Here customers who have desire to apply moratorium on Credit Card Payments should be more cautious as interest rates on Credit Cards are very high.
Further, there is no clarity in case of Home Loans/Auto Loans, how interest of moratorium period will be recovered from customers. It will be decided by Banks individually how they will recover this interest from customers.
As per our understanding, this interest may be recovered in the form of EMIs at the end of normal tenure of loan or this interest may be added to outstanding principal and EMI may be increased by nominal amount.
Whether NBFC or HFC are covered under the scheme
Yes, as per RBI all Commercial Banks including Private Banks, Regional Rural Banks, Small Finance Banks, Local Area Banks, Co-operative Banks, All India Financial Institutions, NBFCs, HFCs, etc.
Whether it is mandatory for Banks to provide Moratorium to Customers
NO, RBI has just advised/allowed the Banks to provide moratorium to its customers. But in this situation it is more likely that all Banks will provide the facility of moratorium to its customers.
Whether MY EMI would automatically cancelled from next month
No, it depends upon your Bank how it design the moratorium scheme. SBI Chairman has said during interview that SBI will provide automatic EMI moratorium to its customers. You have to check with your bank regarding this if your Bank does not communicate with you pro-actively.
Whether I should stop Paying EMI from next month
No, Please confirm with your Bank regarding moratorium facility provided by your Bank before taking any decision in this regard. It may be possible that your Bank may allow moratorium on some selected types of loan only.
Whether Moratorium Facility of all Banks will be same
No, RBI has mandated that Each Bank will design Moratorium Scheme as approved by their Board of Directors. So each Bank may not have same kind of moratorium facility.
Whether availing Moratorium Facility will impact my Credit History or Credit Score/CIBIL Score
No, It will not be considered as default of loan for Credit History or CIBIL score.
At present I am Paying Pre-EMI (Only interest component) whether this scheme will cover me
Yes, it will cover you also.
Whether Availing Moratorium Facility will be compulsory for me
There is no clarity on this aspect in notification. It has been left to the discretion of Banks. SBI has already made it mandatory for its customers. You should check your Bank’s moratorium policy.
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