IDBI Bank Offers Uniform Three-month Moratorium To All Borrowers

IDBI Bank has said it will offer a uniform three-month moratorium on standard term loan repayments to all its borrowers.

Within 24 hours of an RBI announcement in this regard, the bank started sending out SMSes to borrowers informing them that it is “pleased to grant three moratorium on three instalments of your loan account...up to May 31, 2020.”

Wherever the March 2020 instalment has already been paid by the borrower, the relief would be applicable for EMIs payable in April and May. The borrower is not required to make a separate request.

Interest shall continue to accrue on the outstanding portion of the loan during the moratorium period and will be added in the loan amount outstanding, which might result in a marginal increase in EMI. It is, however, not clear whether the moratorium is applicable to credit card dues or not.

To ease the EMI pressure on scores of borrowers amid the pandemic, the RBI on Friday permitted all commercial banks and NBFCs to grant a three-month moratorium on instalment payments on all term loans outstanding as on March 1, 2020.

“The scheme will be uniformly applicable to all standard term loans under structured retail assets (home loan, mortgage loan, auto loan, personal loan, education loan and loan for insurance premium) as on March 1, 2020,” said a notification posted on the IDBI Bank website.

It further said the moratorium is for three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020, and it will not raise the instalment demand during this period. The repayment schedule accordingly will be extended by three months, it added.

If any borrower wishes to make an EMI payment during the moratorium period, it can be remitted to the loan account as pre-payment and the same will be adjusted against the principal amount of the loan. This will attract no pre-payment charge.

“ECS/SI option will not be active during this period, hence the EMI payment, if desired by the customer, has to be paid by him/her separately,” it said.

Instalments/amount overdue on or before March 31 need to be cleared to “avoid penal charges and down-gradation of account and slippage in credit rating”, it added.