Moratorium Policy

INTRODUCTION

To mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure the continuity of viable businesses and provide support to borrowers. The RBI has permitted banks, financial institutions and NBFC’s to grant a moratorium on payment of all loan installments for a certain period. Based on RBI policy, Company has framed Moratorium Policy for its Borrowers to provide relief.

Background

The RBI had released the Statement of Development and Regulatory Policies dated 27th March 2020 where inter alia certain regulatory measures were announced to mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic. As per the notification released by RBI, 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 3 (Three) months on payment of all installments falling due between 01st March 2020 and 31st May 2020.

The RBI has released a new notification dated 22nd May 2020, through which 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 3 (Three) months on payment of all installments falling due between 01st June 2020 and 31st August 2020. Pursuant to this notification, the company has decided to update its moratorium policy.

The repayment schedule for such loans as also the residual tenor will be shifted across the board after the moratorium period as defined in this policy.

Eligibility

• All customers with no overdue EMI as on 01st March 2020 will be eligible under this policy. The customers who are in default as on 29th Feb 2020 can be eligible for the policy if the customer clears all overdue EMIs including charges due till 29th Feb 2020. Any loans availed post 01st April 2020 shall not be eligible for Moratorium.
• All the customers impacted due to current situation can apply for new Moratorium or any extension of Moratorium along with documents to the satisfaction of the company.

Process

The customers can communicate their request either on the phone, chat, or email, or any other means provided by the Company. Once the request is submitted with documents and accepted by the company, the customer will be requested to accept the terms and revised repayment schedule. The customer can express his/her interest at any time during this period.

Any Customer desirous of availing Moratorium for the period of 1st June to 31st August 2020 would need to complete the application procedure as specified in the Revised Moratorium Policy, also any customer desirous of extending the already availed moratorium would need to again complete the application procedure as specified by the company in the Revised Moratorium Policy.

The Tenor of the loan, pursuant to the Moratorium granted for the period from 1st March 2020 to 31st May 2020 will be increased such that the EMIs repayments will start from June 2020 and the NACH or ECS mandate will not be presented during the period for such eligible customers.

Pursuant to the Revised Moratorium Policy Tenor of the loan will be increased by the period of Moratorium granted and the NACH or ECS mandate will not be presented during this period for such eligible customers.

In case, the customer decides to pay during the moratorium period, he/she will be eligible for interest benefit on his/her loans, and interest will be charged only till the date of repayment. There will be no prepayment penalty in case he/she decided to prepay his/her loan during the moratorium.

During the period of Moratorium, the interest will continue to charge at the current rate and the new repayment schedule will reflect the new EMI amount and dates. Hence, we urge the customers to service the loan during the tenor of the loan to have less burden of interest.

Reporting to Credit Information Companies

The rescheduling of payments, including interest, will not qualify as a default for the purposes of supervisory reporting and reporting to Credit Information Companies (CICs) by the lending institutions.

Implementation and Review of the Policy

The Revised Moratorium Policy is applicable from 1st June 2020. The Executive Directors are authorized to approve any operational procedures/guidelines as may be required to implement the policy and make any changes to the policy in line with the directions/guidelines issued by RBI from time to time.

The policy shall be reviewed as and when considered necessary by the Board of Directors of the Company.