Coronavirus / The bank's big announcement will be refunded if EMI is withdrawn in March.
New Delhi: Indian banks finally got moving Tuesday to give relief to borrowers by allowing a three-month deferment of loan EMI repayments, four days after the announcement by the Reserve Bank of India to help ease the financial impact of the coronavirus outbreak.
The implementation of the package had apparently been delayed due to confusion about the modalities, forcing the finance ministry and the central bank to intervene Tuesday.
The Department of Financial Services under the Ministry of Finance directed banks to pass on the benefits to the customers at the earliest and ensure the message is communicated to all branches, said a finance ministry official, who did not wish to be identified.
The central bank will answer some frequently asked questions (FAQs) to address the confusion, an RBI spokesperson said.
On Friday, RBI Governor Shaktikanta Das had announced a three-month loan moratorium for all term loans, providing a massive reprieve to borrowers. The loan moratorium meant that borrowers would not have to pay equated monthly installments (EMIs) either for the loan or on the interest for three months.
It was part of the central bank’s attempts to insulate borrowers from the economic fallout of COVID-19 that has forced many small businesses to shut shop, leading to job losses.
The RBI notification had clarified that interest will continue to accrue on the outstanding portion of the loans during the moratorium period, clearly encouraging those who can afford it to continue paying their EMIs.
Some banks offer clarity
Most state-run banks, including Canara Bank, Punjab National Bank (PNB), Bank of India (BoI), Bank of Baroda and the State Bank of India, took to social media Tuesday afternoon to announce that borrowers were eligible for the loan moratorium as they detailed the process of availing the scheme.