The Reserve Bank of India had announced a moratorium facility for the borrowers. This moratorium facility was announced in March due to COVID-19 which altered the lives of people. The daily workers were not able to earn their wages as the Prime Minister declared a nationwide lockdown. With few restrictions by the first week of June, the country was unlocked.
As per the RBI, conceded portions under the moratorium will incorporate the accompanying installments falling due from March 1, 2020, to May 31, 2020: (I) head and additionally intrigue segments; (ii) projectile reimbursements; (iii) likened regularly scheduled payments (EMIs); (iv) charge card duty.
The moratorium facility was declared in March for three months and then extend another three months till August. Managing Director S S Mallikarjuna Rao of Punjab national bank said only 30 percent made use of this facility rest 70% continued paying. This facility was offered to all customers.
Few customers who used this facility are now requesting to opt-out. The micro borrowers who once opted this moratorium are now opting out as cash comes in. This wonder was seen towards the second of the most recent month when a few customers got some thought regarding the income, the authority included.
Most of the borrowers has regained confidence and started paying their installments. Only 20 percent of home loan customers are using this moratorium facility.
The experts and banks are against availing this facility though the period of payback gets extended there will be interest on the loan. For example – home loan of 30 lakh with a period of payback 15 years, the net additional interest will be 2.34 lakh for a person who opts moratorium. An auto loan of a 6 lakh payback period of 54 months the additional interest could be 19,000.
The borrowers whose income or earnings is not altered by covid19 should pay their EMI’s accordingly. The benefits provided should be undertaken only if there is any problem with regard to income earned. As the moratorium facility lengthens the payback period as well as the interest rate. So think wisely and make every decision. The repayment is mandatory with interest it just about opting in or out the moratorium facility.
