EMIs, Credit Card Repayments: Confusion Continues Despite Moratorium

Over two weeks after the Reserve Bank of India announced a three-month moratorium on loans, there seems to be continuing confusion amongst customers, banks and NBFCs about deduction of equated monthly instalments (EMIs) and repayment of credit card outstandings.

With EMIs typically being deducted in the first 10 days of the month, April has seen a rise in customer grievances on the issue.

Many borrowers who had opted for the moratorium on their loan or credit card dues have approached banks complaining that their EMIs have been deducted.

Others have approached banks pointing out that even though they did not opt for the moratorium, their EMIs have not been deducted and interest added.

“I have received a payment reminder through SMS for my credit card and was not offered a moratorium,” said a customer with a private sector bank.

Twitter handles of banks and NBFCs are also flooded with complaints from customers on why and how their EMIs were deducted or not deducted.

Bankers said they too are trying to sort out these complaints.

“This is a first of a kind initiative and is a learning curve for us too. We had reached out to customers with the details of the moratorium and we are trying to iron out all issues,” said an executive at a public sector bank.

Banks are also promising that any EMIs which may have been deducted for borrowers who had opted for the moratorium will be refunded and in case of non-payment, the account will still be considered standard.

“We have been reaching out to customers on the issues. Any EMI which has been deducted will be credited back in the coming days, latest be the third week of this month,” said an executive with a private bank, adding that they are also working to ensure that EMIs are deducted for customers who had not opted for the moratorium.

With a national lockdown in place due to the coronavirus pandemic, RBI Governor Shaktikanta Das had, on March 27, as part of the monetary policy, announced that all commercial banks, co-operative banks, all-India financial institutions, and NBFCs are being permitted to allow a moratorium of three months for payment of instalments in respect of all term loans outstanding as on March 1. Credit card dues are also part of the moratorium.