RBI announces moratorium on loans: Will I have to pay EMIs? All you should know

New Delhi, Mar 27: The Reserve Bank of India on Friday announced that banks are permitted to allow a three month moratorium of payment of instalments of all term loans outstanding on March 1 2020.

This decision would be applicable to all regional, rural, cooperative banks an NBFCs including Housing Financing Companies. The final decision on whether to pass it on to the consumer is the decision of the bank.

A moratorium period is a time when the borrower is not required to make any repayment. The RBI said that this would not result in asset classification downgrade and will not have adverse impact on the credit history of the borrowers.

Here is what you should know about the moratorium:

• Suspension of EMI: The RBI is yet to issue detailed guidelines on this. More clarity will be available once the same is notified.
• Should I pay EMI: This is a moratorium and hence no EMI is payable until a specified time. In this case, the RBI said up to 3 months. However unless the bank gives a specific approval, your EMI will still be deducted.
• When will it be implemented: Firstly the RBI will have to issue detailed guidelines. Following this the board of the bank will have to take a decision. This decision would be then informed to the customer.
• Will my EMI be waived: No, the EMI will not be waived. It will only be deferred.
• What kind of loans are covered: Only term loans are covered. This would include, home loans, personal loans, education loans, auto and any loans with a fixed tenure. This would also include consumer durable loans including EMIs on fridges, mobiles etc.
• Does this cover credit card payments: No it will not.