How will RBI's 3-month EMI moratorium impact your loans? Here's the answer

Reserve Bank of India (RBI) Goverr Shaktikanta Das on Friday anunced that commercial banks are "permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020." 

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Will banks follow?

decision has created a lot of buzz since those who have retail loans might t need to repay money for next three months (effective March 1). This means that if bank or NBFC permits, n beneficiary can re-pay loan July 1 onwards without any change in interest rate or principal amount.

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RBI clarified that this will have impact on credit history or credit rating of beneficiary. " rescheduling of payments will t qualify as a default for purposes of supervisory reporting and reporting to credit information companies (CICs) by lending institutions. CICs shall ensure that actions taken by lending institutions pursuant to above anuncements do t versely impact credit history of beneficiaries."

It is important to te that RBI has only permitted banks to defer payments, and has t instructed banks to do so. Thus, banks can avoid deferring loan payments.

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Growth projection slashed

This comes after minutes after influential Moody's Investors Service slashed India's 2020 GDP growth projection from its earlier forecast of 5.3% to 2.5% amid global Coronavirus pandemic. Indian government h earlier projected GDP growth at 5% in 2019-20 as compared to 6.1% in 2018-19. Q3 h witnessed a 4.7% growth. India has anunced a Rs 1.7 lakh crore Coronavirus relief pack, split between assuring food security and Direct Benefit Transfer cash-transfer as country observes a 21-day lockdown to combat COVID-19, of which over 700 infections have been confirmed thus far.

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