- If you do not pay the term loan EMI for three months, you would not be treated as a defaulter.
- Deferment in interset payment of working capital for three months, companies would see some relief.
- Deferment does not mean that amount would lapse, it would be charged later.
In order to fight back with the Coronavirus outbreak economically and survival of Indian employees, the Reserve Bank of India today suggested all the banks and lending institutions permit a 3 months moratorium on all types of loans. The RBI also stated that this activity may not result in the downgrading of asset classification.
Now, banks would decide to pass on the benefit to people as many people would be financially affected due to job loss and salary cuts in lockdown situations. The RBI also permitted banks to recalculate the working capital cycle and said that such loss and transactions won’t be treated as non-performing assets.
Shaktikanta Das, Governor of RBI, is confirming that the Indian Banking system is “safe and sound”. He said bank account holders and depositors of commercial and private banks need not worry about the safety of their hard-earned money. He also requested people not to be panic and withdraw their deposits from banks.
RBI’s Monetary Policy Committee also decided to cut the repo rate by 75 basis points to 4.4%, while the reverse repo rate has been reduced by 90 basis points. Mentioning the current situation as “extraordinary circumstances”, the RBI Governor said the RBI is doing its best to make the economy stable and steady.
What Finance Minister Did
Yesterday, the Indian government announced Rs 1.7 lakh crore worth relief package for poor people, employees and women to fight against coronavirus COVID-19 lockdown. Minister of Finance for India, Nirmala Sitharaman has announced Rs 50 lakh medical insurance cover per person for healthcare workers that includes sanitation workers, paramedics, doctors and nurses who are exposing themselves to the risk against the infectious situations of the deadly virus.
The decision taken by the RBI today may result in a pleasant consolation to the EMI payers, term loan borrowers, individuals and businesses undergoing a hard time and unexpected economic crisis due to 3 weeks pan India lockdown announced by the government.
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