RBI extends EMI moratorium

Monday 25 May 2020 11:36 CET | News

The Reserve Bank of India (RBI) has announced an extension of the moratorium on loan EMIs by three months, by the end of August 2020. 

The earlier three-month moratorium on the loan EMIs was ending on May 31, 2020. This makes it a total of six months moratorium on loan EMIs starting from March 1, 2020.

The extension of three-month moratorium on repayment of term loans by borrowers means that they would not have to pay the loan EMI instalments during this period. According to The Economic Times, such treatment will not lead to changes in the terms and conditions of the loan agreements which is same as announced in the previous moratorium period.

Missing an EMI payment would mean risking adverse action by banks which can adversely impact one's credit score. Under normal circumstances, if loan repayment is deferred then the borrower's credit history and risk classification of the loan can be adversely impacted. However, in case of this moratorium the borrower's credit rating will not be impacted in any way.

As per RBI rules, any default payments must be recognised within 30 days and these accounts are to be classified as special mention accounts.

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Keywords: RBI, EMI, loans, the Reserve Bank of India, moratorium, payments
Categories: Banking & Fintech
Countries: India
This article is part of category

Banking & Fintech