No moratorium on interest if you defer EMI payment for three months
Be ready to pay higher interest on your outstanding loan if you decide not to pay EMIs on your home or auto loan for the next three months under a moratorium announced by by the Reserve Bank of India on Friday.
 
Analysts and experts tracking the sector said that simple interest rate would be calculated by banks for the three-month period in which loan repayment was due but was not paid under the moratorium. This would be added up into your EMIs at the end of three-month forbearance, raising your monthly bill.
 
So, if you're deferring payment of an EMI of, say Rs 1,000, and the bank is charging interest at the rate 10 per cent on outstanding, you will end up paying Rs 25 extra on each of the three EMIs that has not been paid during the moratorium. This additional interest may either be added up to all your future EMIs or your loan tenure could get extended at the same EMI level.
 
"Whether the customers will have to pay this additional interest in one go or will be allowed to get it adjusted as additional EMI is something that needs to be clarified by banks," said a financial sector analyst asking not to be named.
 
As a result of the moratorium, the tenure of such loans will get extended by three months which should be possible as floating rate loan contracts typically have a provision for extension of loan tenure.
 
If additional interest burden for three month amoratorium period is also equally divided in all future EMIs, the monthly bill for customer may increase or banks may decide to keep EMIs same but increase the tenure of loan by a few months.
 
"The 3-month EMI moratorium is a welcome move for those customers whose short-term cash flows are adversely affected by the coronavirus pandemic. This basically means that the customers may be allowed to defer their immediate EMI payments, but come June, they will have to resume the payments. It is not a waiver, but only a shift in payment schedules," Kunal Varma, CBO and Co-Founder, MoneyTap said.
 
Customers who have the ability to pay (such as salaried professionals whose incomes are still intact) should compare their original cash flows with the revised repayment schedules and accrued interest payments, and then take a call on what makes the most sense for them, he added.
 
The Reserve Bank Governor Shaktikanta Das on Friday announced a three-month moratorium on EMIs of all term loans due during March 1 to May 31 and said that the repayment schedule for all those loans would be shifted by three months after the moratorium.
 
This will bring relief to all borrowers, including those who have home loans, auto loans, education loans, agricultural term loans, retail and crop loans to their names. It will also be applicable on credit card dues.
 
"In respect of all term loans (including agricultural term loans, retail and crop loans), 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) are permitted to grant a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020," said the RBI's circular to all banks and non-banking financial companies.
 
"The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period," RBI said.
 
As of January-end, over Rs 13 lakh crore of housing loans and Rs 2 lakh crore of auto loans were outstanding, data with the Reserve bank of India shows.
 
Besides retail borrowers, micro, small and medium enterprises and large companies will also benefit from the RBI's relaxation of loan repayment.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    rakeshnangia06

    2 months ago

    Please inform

    pabarirohit

    2 months ago

    IS THIS A RELIEF OR A MOCKERY?

    RELIEF: RBI 3 MONTH MORATORIUM ON LOAN EMI

    To,
    The Finance Minister,
    Government of India.

    SUBJECT: RBI 3 MONTH MORATORIUM ON LOAN EMI

    RBI announced moratorium of 3 months of EMI’s. This will be an extra burden of accrued interest which will be capitalised and will be added to the principal borrowed amount.

    Is this the relief package for the middle class citizens? In reality this is the beneficial proposal and relief package for Banks & Finance Companies.

    Suppose, if we, the middle class citizens are paying our regular EMIs in this critical situations, Banks & Finance Companies will be flushed with huge amount of non-investable fund. In the current situation, who will borrow fresh fund?

    It's an opportunity for them that their funds are automatically reinvested at the same interest rate with us, without any marketing efforts.

    Through our experience, we have learnt that the middle class and relief are two opposites in the real world.

    Isn't this rather a relief measure taken for their prosperity than ours'?

    The need of the day is to give waiver of interest.

    "COMPLETE WAIVER OF INTEREST SHOULD BE GRANTED FOR THE NEXT 6 MONTHS ON BORROWED FUND AS MOST OF THE CITIZENS ARE EXPERIENCING TOTAL LOSS OF INCOME DUE TO THE ESSENTIAL LOCKDOWN.

    AFTER THE CURRENT SITUATION IS UNDER CONTROL, ONLY THEN START THE EMI AND CHARGE INTEREST FROM THAT TERM ONWARDS, NOT BEFORE THAT."

    Note: We all should forward this mail to the Finance Minister [email protected]

    🙏🏻Citizen of India🙏🏻

    pabarirohit

    2 months ago

    To,
    The Finance Minister,
    Government of India.

    SUBJECT: RBI 3 MONTH MORATORIUM ON LOAN EMI

    RBI announced moratorium of 3 months of EMI’s. This will be an extra burden of compound interest which will be capitalised and will be added to the principal borrowed amount.

    This is not the relief package for the middle class. This is the relief package for Banks & Finance Companies.

    Suppose, if we, the middle class citizens are paying our regular EMIs in this critical situations, Banks & Finance Companies will be flushed with huge amount of non-investable fund. In the current situation, who will borrow fresh fund?

    It's an opportunity for them that their funds are automatically reinvested at the same interest rate with us, without any marketing efforts.

    Through our experience, we have learnt that the middle class and relief are two opposites in the real world.

    Isn't this rather a relief measure taken for their prosperity than ours'?

    "COMPLETE WAIVER OF INTEREST SHOULD BE GRANTED FOR THE NEXT 6 MONTHS ON BORROWED FUND AS MOST OF THE CITIZENS ARE EXPERIENCING TOTAL LOSS OF INCOME DUE TO THE ESSENTIAL LOCKDOWN.

    AFTER THE CURRENT SITUATION IS UNDER CONTROL, ONLY THEN START THE EMI AND CHARGE INTEREST FROM THAT TERM ONWARDS, NOT BEFORE THAT."

    Note: We all should forward this message to the Finance Minister.

    🙏🏻Citizen of India🙏🏻

    Grofers user gets delivery slot for April 13, no slots on Bigbasket
    Day 2 of COVID-19 lockdown was no different for people who tried to book online delivery of essential items like groceries, milk and vegetables at Bigbasket, Grofers and other online platforms.
     
    To one user's amusement, he got the next delivery slot on Grofers for Monday, April 13.
     
    "When trying to place a new order, the earliest delivery date is coming out to be Monday 13th April. I mean seriously? 19 day waiting period during a lockdown of 21?" Tanmay posted to Grofers on Twitter.
     
    The online delivery platform replied: "Due to the current situation and spike in demand, you have experienced a high turnaround time for the delivery of your order. While we understand that this isn't ideal, we're acting to execute things for you as soon as possible".
     
    The company said it has gone live in a few cities with the help of local authorities nd is hopeful of restarting operations in other cities within a day or two. It, however, did not disclose in which cities it has resumed delivery of essential items.
     
    People experienced similar woes on Bigbasket.
     
    Noida resident Arun Kumar, 42, placed an order for fruits on Thursday morning and got the message from Bigbasket: "Unfortunately, we do not have any available slots to service you right now. Please try again later".
     
    Bigbasket posted on Twitter: "Our delivery executives are working around the clock and overtime to deliver essentials to as many customers as possible".
     
    A Pune resident replied: "Didn't get delivery of Milk today, vegetable orders already canceled. Plz confirm "tomorrow u guys going to deliver milk or not?"
     
    On food delivery platform Swiggy, some new restaurants popped up for Noida Sector 143 residents, although no known restaurants names were available.
     
    Some city authorities late on Wednesday allowed home delivery of essential goods by online apps.
     
    Gurugram Police Commissioner Mohammad Akil said that operators like Zomato, Flipkart, Amazon, Bluedart, Wow Express, Swiggy, Grofers, Bigbasket, Milk Basket, Dunzo, Big Bazaar, and Iffco Tokyo will be allowed to continue delivery services.
     
    Online marketplaces like Flipkart and Amazon along with delivery platforms like Bigbasket, Grofers and FreshToHomes hit a major blockade as local authorities shut warehouses and sent delivery boys back, even harassed them.
     
    Millions of people across cities were left helpless at homes as essential items did not reach their doors despite placing orders well in advance.
     
    Despite the assurance from local authorities, the situation remained grim on Thursday.
     
    Amazon India posted on its website that "considering the prevailing extensive lockdowns and restriction in movement, pending deliveries will be delayed. New ordering is available only on essential products through pre-paid payment methods".
     
    "We are continuously evaluating the situation and working towards resuming deliveries soon".
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
     
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    User 

    Railways extends time limit to stay in its retiring rooms
    Even as thousands of passengers were left stranded at railway stations across India in the wake of suspension of train services, the Indian Railways on Monday announced relaxation in the time limit prescribed for passengers to stay in its retiring rooms.
     
    This relaxation shall be in force till normal train services resume.
     
    "It has been brought to our notice that certain passengers were lodged in railway retiring rooms and supposed to travel by train in a day or two, but are now stuck as all trains stand cancelled and they have nowhere else to go.
     
    "So, the Railway Board has decided that in all such cases, the stay may be extended in supersession of the relevant rule that limits the number of days passengers can stay in retiring rooms," a senior Railway Ministry official here said.
     
    The decision comes in the wake of suspension of all public transport across the country due to coronavirus scare.
     
    "All station masters will be conveyed this instruction quickly for the benefit of stranded passengers," he added.
     
    In view of the ‘Janata Curfew' called by Prime Minister Narendra Modi between 7 am and 9 pm on Sunday, trains that began their journeys before the morning limit will reach their destinations.
     
    Services of over 13,600 trains, including passenger, mail and express, were suspended from Sunday midnight to March 31. Only freight trains shall operate to ensure supply of essential items.
     
    On Monday, the total number of coronavirus cases in India rose to 384, with seven casualties.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylif is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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