Money & Banking

Amidst confusion over loan moratorium, bankers rush to explain terms to customers

Surabhi Mumbai | Updated on April 01, 2020 Published on April 01, 2020

IBA hopes that the FAQs will clear the queries


The frequently asked questions (FAQs) on the three-month loan moratorium by the Indian Banks’ Association on Tuesday night came in the wake of much confusion amongst customers on their loan status.

Many bankers reported that they were getting questions from customers on whether the three-month deferment would be akin to a waiver and whether all customers should take it.

“Since the start of the week, customers have been sending queries on whether the loan moratorium means that they do not have to pay any EMI for these three months. We have been explaining to them that this is not the case,” said an executive with a private bank.

Another banker said banks have been advising customers to continue paying the EMI if they can afford to.


“If there is no disruption in their salaries due to the lockdown, it is advisable that they continue paying their loan instalments as else they would have to pay higher interest than what the funds lying in the savings bank account would get,” said another banker.

There have also been questions as to loan instalment for which months would be extended, bankers said.

Further, there are doubts on whether banks give a blanket moratorium for the period or customers have to request for it individually.

The IBA in its FAQs said that rescheduling of principal can be done for a period of three months falling due between March 1 and May 31. Similarly, for EMI based term loans, it will be three EMIs falling due between March 1 and May 31 and the tenor will be extended by three months and have to be repaid during the extended period.

Bankers said that customers are free to get in touch with them on how to proceed with their loan repayments. Many are also sending text messages to get their answers and feedback.

With a national lockdown in place due to the coronavirus pandemic, RBI Governor Shaktikanta Das had on March 27 as part of the monetary policy announced that 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.

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Published on April 01, 2020
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