News Of The Day: No Need To Pay EMIs For 3 Months

The Reserve Bank of India (RBI) today announced moratorium on term loans for up to three months. The RBI in its statement said, "All commercial banks, co-operative banks, all -India Financial Institutions, and NBFCs 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."

This is likely to mean that individuals EMI repayments of loans taken would not be deducted from their bank accounts till the above mentioned time. The loan EMI payments will restart only once the time period expires.

The relief has been come after the finance ministry wrote to the central bank suggesting a moratorium on EMI, interest and loan repayments for few months, as per an Economic Times report.

There have been requests from various stakeholders to defer the EMI payments as the country is going through a 21-day lockdown due to spread of COVID-19.

This will come as relief as many individuals, especially self-employed individuals, were staring at income loss and would have found it difficult to service their loans such as car loans, home loans etc. If they had missed any EMI payment they were risking adverse action by banks which could result in a hit on their credit score.