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Close on the heels of the RBI’s Covid-19 package, SBI Cards and Payment Services has given its cardholders the option to avail a moratorium on their credit card dues.
The moratorium period is of three months, for making payment of credit card outstanding balance/EMIs which are due between March 1 and May 30 this year, as well as the entire outstanding amount, including the applicable interest and charges (other than late payment charge) during this period, as per the cardholder’s June 2020 payment due date.
For EMI payments, there will be no extension of tenure. Any account which was in current status (non-delinquent with no overdues) as on February 29 would be eligible for the moratorium, SBI Cards has said.
The RBI had left it to the financial institutions concerned to decide whether they would like to offer the loan moratorium (which includes credit card dues) in view of the hardships faced by customers on account of the 21-day lockdown announced by the government for minimising the spread of coronavirus.
As of end November 2019, SBI Cards had 9.83 million credit cards, with total outstanding credit card spends of ₹1.03 lakh crore in 2018-19. The gross loans and advances outstanding to customers as of December 31, 2019 stood at ₹ 24,776 crore.
The credit card issuer has introduced the concept of auto-enrolment for a moratorium in case no payment is received on the respective due dates falling in March, April, or May.
For accounts where there is auto debit/SI, the same would be executed as usual. However, in case of dishonour of the instructions, the account would be enrolled for the moratorium and the dishonour (bounce) charges would be reversed accordingly.
Not a waiver
SBI Cards has made it clear that opting for moratorium on credit card dues merely defers the payment and not be construed as a waiver. The credit card dues will continue to accumulate interest, other applicable charges (other than late payment fee) and residual GST.
The credit card issuer has advised its customers to make card payments regularly to lessen the burden from accumulation of outstanding amount.
On the impact of moratorium on the credit score of its customers, SBI Cards has said it is unable to comment on this front. However, it will continue to report updated balances every month along with the repayment status as of February 2020, during the moratorium period. Normal credit bureau reporting would start from June onwards; the company has said.
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