The loan moratorium will be extended till August 31, Das said as he announced the third tranche of COVID-19 relief measures.
RBI Governor Shaktikanta Das on May 22 announced an extension of the moratorium on term loan EMIs by three months. The deadline of the earlier moratorium was May 31.
The loan moratorium will be extended till August 31 making it a six-month moratorium in all, Das said.
Das noted that term loan borrowers had raised concerns about the interest burden that will continue to remain as it is only a moratorium and not a waiver of EMIs. To address this concern, he said, the accumulated interest of the six months on loan moratorium can now be converted into a term loan.
During a moratorium period, a loan term borrower does need to make repayments, usually done as equated monthly installment (EMI). In this case, for example, customers who have availed either a fresh term loan or have an ongoing loan will not have to pay any EMI for six months between March 1 to August 31.
Governor Das had announced a three-month moratorium for all term loan repayments between March 1 and May 31 in his last address in April.
Das said the lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021.
Among other things, Das announced a repo rate cut of 40 basis points to 4 percent.Track live updates of RBI Governor Shaktikanta Das' address