RBI COVID-19 Regulatory Package FAQs

Find Details Below

RBI COVID-19 Regulatory Package FAQs

Find Details Below

RBI COVID-19 Regulatory Package FAQs

Find Details Below

RBI Covid-19 Relief Package - FAQs



1. What is an effective period of RBI COVID 19 Regulatory Package?
Ans : - This is valid on instalments falling due between 01 March 2020 - 31st May 2020 where loans are booked before March 1, 2020.
The implementation of this package is on a retrospective basis. So, it shouldn't be misunderstood that it is valid till the 30th June 2020 because the announcement happened towards the end of March. Click Here

2. What type of loans are covered under the RBI COVID 19 Regulatory Package?
Ans : - Retail Term Loan, Working Capital Loan and Credit Card Loan are covered under this.

3. What types of Retail Term Loans are covered under this Package?
Ans : -It will cover Home Loan, Education Loan, Loan Against Property, Lease Rent Discounting Loan, Vehicle Loan, Consumer Goods Loan, Personal Loan, Business Instalment Loan, Medical Equipment Loan, Agriculture Loan, Crop Loan, Credit Card EMIs or any Guaranteed Instalment Loan.

4. What relief RBI has provided for retail term loan borrowers under COVID 19 Regulatory Package?
Ans : -RBI has permitted lending institutions like Banks, NBFC, etc. to grant a moratorium of upto three months on the payment of instalments falling due between March 1, 2020 and May 31, 2020.
Hence, you can choose not to pay the EMI instalments of this period. Accordingly, the residual tenor of the repayment schedule will be adjusted/extended.

5. What relief RBI has provided for working capital borrowers under COVID 19 Regulatory Package?
Ans : - RBI has permitted lending institutions like Banks, NBFC, etc. to grant a deferment of upto three months on the payment of interest falling due between March 1, 2020 and May 31, 2020.
Hence, you can choose not to pay the interest of this period. The accrued interest has to be paid immediately after the deferment period i.e. May 31, 2020.

6. What is the meaning of Moratorium and Deferment?
Ans : - Moratorium means a temporary break of activity which will restart from where it stopped whereas Deferment means putting something off to a later date and time.

7. Is this a waiver of an outstanding loan ?
Ans : - No, it is not a waiver or Karja Mafi.

8. What is the process for getting the benefit under this package?
Ans : - You have to write to the lending institution via email or give an application to stop the collection of dues in their respective acceptable format. Click Here

9. Are some lenders automatically applying this scheme?
Ans : - Yes, a few lenders are uniformly applying this scheme for the convenience of borrowers due to lockdown.

10. What if I want to pay my EMIs / Interest?
Ans : - You have to write to the lending institution via email or give an application to stop the collection of dues in their respective acceptable format. Click Here

11. If I am under a disbursement linked Pre-EMI scheme can I avail this moratorium?
Ans : - No, it will only be applicable for borrowers who are serving full EMI / Interest.

12. Will I be charged a late payment fee by lending institutions like Banks, NBFC, etc. ?
Ans : -You will not be charged any late payment or penalty fee for the non-payment of EMIs / Interest during this period.

13. Will I be charged interest during this period?
Ans : - Yes, the loan account will accrue interest at a monthly compounding rate.

14. What interest will be applicable during this period?
Ans : - The interest rate will remain the same until the benchmark rate i.e. Base Rate, MCLR, Repo Rate and Benchmark Prime Lending Rate (BPLR) changes. It has no link with RBI COVID 19 Regulatory Package.

15. Will it affect my Credit Score?
Ans : - No, it will not affect your Credit Score as RBI has instructed the lenders not to report any delay in payment during this period.

16. What will happen to the loan accounts which are delinquent / in default /overdue / NPA on or before 1st March 2020?
Ans : - If there are dues outstanding before 1st March 2020, they need to be cleared to avail this scheme. If the status quo is maintained then they will be reported as per norms and lenders are free to impose penal charges, downgrade account and downgrade the credit rating.

17. Will all these measures of RBI be treated as “restructuring”? What about the provisions applicable?
Ans : - The measures stipulated by RBI under the March 27, 2020 circular on COVID-19 Regulatory Package will not be treated as “Restructuring” and hence will not result in asset classification downgrade. Accordingly, the enhanced provisions for Restructured Accounts will not apply.

18. Is COVID 19 Regulatory Package applicable to NRI borrowers?
Ans : - Yes, it is applicable.

19. Can I get the refund of my March EMI / Interest as it got auto-debited ?
Ans : - Only a few lenders are offering a return of March EMI / Interest especially PSU banks like SBI, BOB, etc. You need to get in touch with your bank. Click Here

20. Can I pay for only March or March & April and avail scheme for only April & May or May respectively?
Ans : - Yes, you can avail the benefit in both ways.

21. How to apply for a particular month like only for May?
Ans : - You can write your application accordingly or apply via link at a later date or confirm your opt-in at a later date. However, it should be within the permissible time limit set by your lender

22. Can I extend the benefit period or choose to take it at a later date?
Ans : - No, the benefit period can’t be extended. You can’t choose to take the benefits beyond the mentioned period.

23. Can I selectively choose from two loans, on which I want to avail the benefit ?
Ans : - Yes, you can choose on which loan account you would like to avail the scheme.

24. Will I be able to use my Credit Card’s available limit if I opt for the moratorium?
Ans : - Card issuers policy differs on this, so it is recommended to follow the terms and conditions of your card issuer.

25. If the customer has already availed a moratorium on Education Loan, can the tenure get extended?
Ans : - No, since the repayment for such customers will start in the future and the moratorium is only for customers whose repayment (Interest or EMI) is active in the period between March 01 and May 31, 2020.

26. Can I make the payment even after I have opted for the scheme?
Ans : - Yes, you can pay. However, the effect of the same will apply based on your lender’s “Reducing Balance” Policy. It is followed in two ways i.e. Daily Reducing and Monthly Reducing.

In Daily Reducing, you don't have to look into anything before making payment.However, In Monthly Reducing, you need to precisely check with the lender about the cycle of the month in which they accept the payment and give you the benefit of No Interest on the prepaid amount from today to the next EMI date.

Eg. If you have a loan of 50 lacs and you wish to make a payment of 1 lacs on the 10th of a month with a thought that the lender will not charge me interest from the date of making the payment. Then, your understanding may go wrong if the lender has a policy to accept payment for your loan book between 1st and 5th of the month for the purpose of account reconciliation
In this case, you will not get any interest benefit for this prepayment until your loan account enters into the next cycle.
In short, the payment will go waste as the lender will earn Double on your money. Firstly, on the money, which you have made as prepayment and secondly, on your loan account.
In such cases, it is suggested to keep the amount in Savings or CC Account as at least it will accrue/save interest for you.

27. Can I foreclosure the Loan facility or partially prepay during the moratorium period?
Ans : - Yes, you can do the same. However, while prepaying keep the above point of Monthly Reducing in mind and then opt-out from the RBI scheme.

28. How will it affect me as a borrower if I choose to avail the scheme under home loan, credit card loan and a working capital loan?
Ans : - llustrations: Abha has three loans:

1- Home Loan of Rs. 50 lacs @ 7.30% p.a. at an EMI of Rs. 50,917.69 with a remaining tenure of 150 months
2- Credit Card Loan Outstanding of Rs. 1 lacs @ 3% p.m.
3- Business Working Capital Loan of Rs. 30 Lacs @ 12%
She wishes to choose for the remaining two months moratorium and deferment scheme for all the loans and wants to understand the impact of the same.
Her,
Home Loan tenor will increase by 6 months considering the current rate. In terms of money, it will be an additional amount of Rs. 3,06,937.25
Credit Card Loan will inch up by Rs. 1,06,090 after accruing interest and have to be paid immediately after the end of the mentioned period.
Business Working Capital Loan Interest Liability will accrue
Rs. 90,903 i.e. [ 30603 ( March Due Interest) + 30300 ( April Due Interest + 30000 (May Interest) ] till 31st May and will have to be paid immediately after that. Here, she will have to pay Rs. 903 as an interest on interest.

29. Should I opt for this scheme?
Ans : - The above case depicts that it will create an additional burden on you. Therefore, it is suggested to opt for this scheme only if you are having a liquidity crunch or have dim visibility of positive cash flows in the coming months.

30. How can I reduce the impact on term loans if I opt for this scheme due to liquidity issues?
Ans : - The impact on term loans increases because they are usually long term loans. The principal payment is stretched for a long period resulting in more interest payment. So, you can choose to pay 4 EMIs in advance after two years, when you find yourself in a financially stable situation. It will negate the impact of the availed moratorium and you would be able to close the loan within 150 months only. The Longer the Delay in Pre Payment - The Higher The Tenor.

Disclaimer: The FAQs are prepared based on our understanding from FAQs of 40+ Lenders. In case of any ambiguity, check with your respective lender as we might have understood wrongly.