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 / 08:11 PM 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.
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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.
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