Moneycontrol PRO
HomeNewsBusinessEconomyRBI asks banks to offer 3-month moratorium as default with option to opt out: Report

RBI asks banks to offer 3-month moratorium as default with option to opt out: Report

RBI says moratorium facility should be extended to all unless a borrower chooses to opt out of it

April 07, 2020 / 20:11 IST

The Reserve Bank of India (RBI) has told banks and non-banking financial companies (NBFCs) that all borrowers should get the three-month moratorium and can opt-out if they choose, the Economic Times reported.

Banks had chosen to either make the moratorium a given (with an option to opt-out) or had asked borrowers to opt-in to defer payment of loan interest and principal.

Follow our LIVE Updates on the coronavirus pandemic here

The new email communication on April 6 has made it mandatory for all banks and financial institutions to consider all customers ‘under moratorium by default’, the paper said.

Also read:
1. EMI moratorium: ICICI Bank vs HDFC Bank vs Axis Bank - all you need to know
2. Moratorium: Skipping three EMIs? Be ready to pay 16 more instalments
3. RBI moratorium: Postponing credit card dues will mean paying exorbitant interest costs
4. No-cost loans: Don’t postpone dues unless strapped for cash
Moneycontrol could not independently verify the report.

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

The new directive would make things difficult for banks that lean more on credit deposits to keep cash flow steady, and would not see much inflow from the lower cash reserve ratio (CRR) and bond sales.

Bankers have told the paper this is not in line with the Match 27 circular which asked banks to conduct the moratorium as per “board-approved policies” and, in effect, left it up to individual banks to decide.

Follow our full COVID-19 coverage here

Moneycontrol News
first published: Apr 7, 2020 01:00 pm

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Subscribe to Tech Newsletters

  • On Saturdays

    Find the best of Al News in one place, specially curated for you every weekend.

  • Daily-Weekdays

    Stay on top of the latest tech trends and biggest startup news.

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347