The Reserve Bank of India (RBI) today announced that all banks and NBFCs have been permitted to allow a moratorium of 3 months on repayment of term loans outstanding on March 1, 2020.
This means that individuals’ EMI repayments of loans taken would not be deducted from their bank accounts till the moratorium period is over. The 3-month moratorium will apply to corporate loans, home loans and car loans.
The RBI governor further said, “The moratorium/deferment is being provided specifically to enable the borrowers to tide over the economic fallout from COVID-19.
This means that availing such a moratorium would not lead to a down grading of the borrower’s credit rating (CIBIL score).
This will come as relief as many individuals, especially self-employed individuals, were staring at income loss and would have found it difficult to pay their loans such as car loans, home loans etc.