COVID -19 Outbreak : RBI grants three-month relief on loan repayment

Representational image credit : Reuters

New Delhi, Mar 27 : A day after Finance Minister Nirmala Sitharaman announced a massive Rs 1.70 lakh relief package for the poor in view of the Covid-19 outbreak, the Reserve Bank of India stepped-in to ease the pressure on the middle class and corporates by announcing a three-month moratorium on EMIs of all term loans outstanding as on March 1, 2020, a move that will benefit millions of Indians and corporates.

“All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) (“lending institutions”) are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by three months,” the RBI said in a statement.

Stressing upon the needs to provide credit to the stressed sectors of the economy, the RBI Governor announced 75 basis points reduction in repo rate, the rate at which RBI lends short term money to banks, to 4.40% from 5.15% earlier.

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