Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

The <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword> Tuesday deferred to November 5 the hearing on a batch of pleas relating to charging of interest on interest by banks on EMIs which were not paid by the borrowers who availed of the RBI <keyword id="6840678" type="UNKNOWN" weightage="20" keywordseo="loan-moratorium">loan moratorium</keyword> scheme in view of the COVID-19 pandemic. The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> and the Finance Ministry have already filed separate additional affidavits in the apex court saying that the banks, financial and non-banking financial institutions will credit into the accounts of eligible borrowers by November 5 the difference between compound and simple interest collected on loans of up to Rs 2 crore during the <keyword id="117489" type="PERSON" weightage="20" keywordseo="moratorium">moratorium</keyword> scheme period. A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah was requested by Solicitor General Tushar Mehta that the hearing in the loan moratorium case be deferred as he would be busy arguing on behalf of the Centre in other matter relating to the Central Vista project. "These moratorium matters were listed yesterday but they came up today. I am requesting for an adjournment considering I have a case (Central Vista) where I will be arguing" the law officer said. A letter seeking deferment of the hearing in the case was also circulated by advocate-on-record Anil Katiyar for the Centre to the parties and the bench. The top court acceded to the request and adjourned the hearing on pleas including the one filed by Gajendra Sharma on November 5. The pleas pertained to charging of interest on interest by banks on EMIs which have not been paid by borrowers after availing the loan moratorium scheme of RBI during March 1 to August 31. Earlier, the RBI had filed the affidavit saying that it has asked all banks, financial and non-banking financial institutions to take "necessary actions" to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme. Prior to this, the central government had told the apex court that lenders have been asked to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the RBI's loan moratorium scheme by November 5. The government had said that the ministry has issued a scheme as per which lending institutions would credit this amount in the accounts of borrowers for the 6-month loan moratorium period which was announced following the COVID-19 pandemic situation. On October 14, the apex court had observed that the Centre should implement "as soon as possible" the interest waiver on loans of up to Rs 2 crore under the RBI's moratorium scheme and had said that the common man's Diwali is in the government's hands. The RBI had on March 27 issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1, 2020, and May 31,2020, due to the pandemic. Later, the moratorium was extended till August 31 this year. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/prajakta-koli-aka-mostlysane-advice-for-content-creators-on-the-fine-line-between-brand-collaborations-and-staying-honest-on-social-media/articleshow/79013162.cms">Prajakta Koli aka MostlySane’s advice for content creators on the fine line between brand collaborations and staying honest on social media</a> <a href="https://www.businessinsider.in/business/ecommerce/news/flipkart-acquires-gaming-startup-mech-mocha-as-it-looks-to-tap-the-social-gaming-space-for-more-consumers/articleshow/79014466.cms">Flipkart acquires gaming startup Mech Mocha as it looks to tap the social gaming space for more consumers</a> <a href="https://www.businessinsider.in/india/news/covid-19-vaccine-updates-pfizer-moderna-to-roll-out-covid-19-vaccine-by-december/articleshow/78924143.cms">COVID-19 vaccine tracker: German CureVac shows an immune response, Aspen Pharmacare and J&amp;J sign pact to make vaccine in South Africa</a>

Supreme Court verdict on loan moratorium case deferred to November 5

<keyword id="6383459" type="COMPANY" weightage="100" keywordseo="Ujjivan-Small-Finance-Bank">Ujjivan Small Finance Bank</keyword> (SFB) is expecting contraction in interest and fee incomes this fiscal due to business disruptions caused by COVID-19 and ensuing lockdowns, its annual report has said. The bank, however, said that the pandemic situation had a minimal impact on its books in FY 2019-20 as the nationwide lockdown was imposed in the last few days of March, by which time most of bank's collections had already come. The 2019-20 annual report said the lockdown "did impact the typically high year-end growth momentum of March, and our volumes stood lower than that envisaged earlier and significantly lower than that in the previous month, which affected the interest and fee income". The surplus liquidity carried as a buffer for the crisis period has led to a slight increase in finance cost for the last week of March, it said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/wework-gets-funds-from-softbank-while-india-franchise-offers-discounts/articleshow/77540098.cms">WeWork gets a new $1.1 billion cheque from SoftBank while it attempts resurrection – its India franchise is now offering discounts and a global all-access pass</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/wework-gets-funds-from-softbank-while-india-franchise-offers-discounts/articleshow/77540098.cms"></a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/eicher-motors-registers-first-ever-net-loss-of-55-crores-in-at-least-a-decade/articleshow/77526012.cms">Eicher Motors registers first-ever net loss of ₹55 crores in at least a decade</a> The benefit of RBI dispensation on NPA recognition norms were applied on the <keyword id="117489" type="PERSON" weightage="20" keywordseo="moratorium">moratorium</keyword> portfolio, and it prevented any spike in credit cost, as per the report. "Although we shall continue to accrue interest income on the outstanding portfolio including those accounts that opt for moratorium, there will be an overall contraction in interest income and fee income on account of lower business volumes due to lockdown and adherence to social distancing norms," the bank said in it outlook for 2020-21. However, the bank said it expects a steady reduction in cost of funds due to the several stimulus measures of the RBI to enhance liquidity in the banking system. The lender added that the impact on credit cost remains to be seen at the end of the moratorium and the end of dispensation on NPA (non-performing assets) classification at the end of August 2020. Citing customer surveys, Ujjivan SFB said there have been temporary dip in household income levels in the wake of COVID-19 crisis and addressing the credit needs of this segment would help customers resurrect their businesses and livelihoods. "Given the ongoing crisis situation, we visualise it to be a good time to sensitise our customers and their families on basic savings and banking behaviour and promote goal based deposits, as our deposit rates remain attractive," it said. The bank said as digital payments have increased due to the pandemic, Ujjivan considers it as a good opportunity to expand initiatives and increase adoption to digital channels. "Our continued efforts on contactless and digital banking services will stand us in a good stead to further our outreach and build on this opportunity. Moreover, the volatility in the market yields is expected to help in the growth of institutional deposits," it said. Going forward, bank's strategy would be to manage the effects of lockdown and it will set in motion initiatives such as curtailing credit cost, re-starting business with repeat clients, scaling deposits and Sampoorna banking business. Bank's Sampoorna Family Banking solution was launched to address every household's comprehensive banking requirements, ranging from the youngest member to the senior citizens. The bank said it will also penetrate into new geographies and further push the growth of rural banking. "We will also introduce consumer durable loan, micro loan against property and use an analytics-based model to graduate group loan customers. Additionally, we will simplify our digital pre-approved loan process with the help of data analytics and expand our UPI QR based payment solutions for merchants via UPI acquirer platform and our UPI PSP Mobile app," Ujjivan SFB said in the report. Besides, the lender said that it will step up its cashless repayment further through its Money Mitra initiative and will offer banking services from neighbourhood shops and pilot cash collection points. "We are also planning to launch a voice-, video- and vernacular-based, easily navigable mobile banking app for microfinance customers to drive digital usage," it said. Moving ahead, the bank will expand the product base with new channels of loan EMI payment via popular and easy-to-use platforms -- Popular UPI apps, BBPS, CCAvenue and Billdesk and use of BC and digital pre-approved individual loans via phone banking and mobile app, it said. Also, the bank will concentrate on semi-formal and formal MSME segments, led by its diversified product offering and relationship based approach. Further, the bank said it plans to launch fintech partnerships in supply chain finance domain to provide an additional lead channel and will also introduce digital onboarding platform for improved delivery processes. During 2019-20, Ujjivan SFB registered a 28 per cent growth in its gross advances at Rs 14,153 crore as on March 30, 2020. Deposits of the bank were up by 46 per cent at Rs 10,780 crore while the retail deposits rose 73 per cent to Rs 4,724 crore. Bank's total income in FY20 jumped by 49 per cent to Rs 3,026 crore, earning net profit of Rs 350 crore, which was higher by 76 per cent from a year ago. Ujjivan SFB, which began its operations in Februray 2017, got listed into the capital market in December 2019, which was termed as one of the most subscribed IPOs in 2019. The bank with its branches spanning across 24 states and union territories had a customer base of 54.4 lakh as on March 31, 2020.

Ujjivan Small Finance Bank sees shrinking interest and fee incomes due to loan moratorium this year

Mumbai, Jun 17 () Interest rate waivers for bank loans during moratorium will harm the depositors, the All India Bank Depositors' Association (AIBDA) has said adding that interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Bank depositors will be "severely hit" if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, it said. It further added that historically, the sovereign covered the loan interest waivers, but in the current situation, a shortfall in revenues both at the Centre and state level will not permit the same. Meanwhile, on June 12, the Supreme Court had asked the Centre and the Reserve Bank of India (RBI) to hold a meeting within three days to decide on waiver of interest on interest for deferred payments of instalments for loans during the moratorium period announced in wake of the coronavirus-induced lockdown. "Our query is very limited on whether there can be waiver of interest on interest," a bench of Justices Ashok Bhushan, S K Kaul and M R Shah had said, adding it will take a balanced view of the matter. The AIBDA said media reports on the Supreme Court observations have been "extremely unnerving" and added that the same prompted it to make the depositors' stance known. "We are greatly perturbed about the likely ramifications of the loan interest waiver on the banking sector, and on the prudential financial discipline of the borrowers," the association's secretary Amitha Sehgal said in the statement. The Supreme Court should dispose-off the petition, it recommended, adding that opting for interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Credit demand has also gone down and will revive as the lockdown eases, it said, adding that the depositors' money is unlikely to be used for it as the low cost funds made available by the RBI will be deployed. As the depositors' money is unlikely to be used, "there is a case for protection of depositors' interest by way of freezing the deposit rates at the pre-COVID-19 level," it said, adding it is yet to hear from the RBI on this. AA DRR DRR

Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA

Mumbai, May 22 () The Reserve Bank of India (RBI) on Friday slashed interest rates, extended moratorium on loan repayments and allowed banks to lend more to corporates in an effort to support the economy which is likely to contract for the first time in over four decades. The benchmark repurchase (repo) rate was cut by 40 basis points to 4 per cent, Governor Shaktikanta Das said announcing the decisions taken by the central bank's Monetary Policy Committee (MPC) that met ahead of its scheduled meeting in early June. Consequently, the reverse repo rate was reduced to 3.35 per cent from 3.75 per cent. He said the MPC had voted to maintain its accommodative stance, implying more rate cuts in the future if need arises. The RBI supplemented the interest rate cut by extending by three months the permission given to all banks to give a three-month moratorium on payment of monthly instalments on all outstanding loans, providing relief to home and auto buyers as well as real estate sector where construction activities are already at a standstill. The moratorium on interest on working capital was also extended by three months. Also, interest accumulated for the six-month moratorium period can be converted into a term loan, Das said. Further, bank exposure to corporates has been raised to 30 per cent of the group's networth from the current limit of 25 per cent, a move that will allow lenders to give larger loans to companies. In its first official forecast for economic growth, the central bank has said the gross domestic product (GDP) is likely to contract in FY21 (April 2020 to March 2021). Das said the inflation outlook is highly uncertain due to the outbreak of the COVID-19 pandemic and expressed concern over elevated prices of pulses. He also said there is a need to review import duties to moderate prices. Headline inflation may remain firm in the first half of the year and may ease in the second half. Inflation may fall below 4 per cent in the third or fourth quarter of the current fiscal, according to the Governor. This is the second straight cut in interest rates in two months. On March 27, RBI had cut interest rates by 75 basis points. "After extensive discussions, the MPC voted unanimously for a reduction in policy repo rate and for maintaining the accommodative stance of the monetary policy as long as necessary to revive growth and to mitigate the impact of COVID-19 while ensuring that inflation remains within the target," Das said. The central bank will remain vigilant and in battle readiness to address dynamics of unknown future arising from COVID-19 outbreak, he added. DP ANZ ANS ANS

RBI ramps up economic support; cuts interest rates, extends loan moratorium

New Delhi, Apr 1 () Three-month moratorium on EMI payments offered by banks is unlikely to bring much relief to borrowers hit by COVID-19 lockdowns as they will have to bear the extra cost of interest charged by lenders and a longer repayment period, according to experts. Experts feel that the three-month moratorium on repayment on loans to help people fight the impact of coronavirus seems to be benefiting banks rather than borrowers as they will have to pay accumulated interest through increased number of EMIs. It is an expensive proposition for any borrower to opt for three-month suspension as announced by the RBI under the relief measures to mitigate the hardship of those hit by the outbreak of COVID-19 pandemic. Last Friday, the RBI had announced that all term loans, including retail and crop loans and working capital payments, will be covered by the three-month moratorium. Banks will now have discretion in deciding the limits on working capital, with the RBI saying that no payment miss should be considered a default and reported to credit information companies. It seems like a double whammy for borrowers as on one side income has been hit due to COVID-19 pandemic and on the other hand, there is a threat of increased tenure if they opt for RBI relief measure. SBI managing director C S Setty said it has two components- people who have term loans and the business units that have working capital loans. "In the case of term loans, the RBI has clarified that the instalments, which includes principal as well as interest, where the instalments are falling due between March 1 and May 31, will be deferred for three months. "So, in a term loan where the instalments are deferred and interest is also deferred means it is to be back ended. No point in again loading the term loan interest right away after three months, which customers would find it difficult," he said. So, what SBI is doing is that these three monthly installments that are falling in this period, will be back ended at the end of the repayment period, he said, adding, any deferment of interest over such long period, if it is there, will entail additional costs because it is not interest waiver, it is interest deferment. The accrued interest will be collected by the lender in the form of additional EMIs from those borrowers who opt for three months moratorium. "We have been telling our customers through social media that if you have the ability and cash flow to pay, it makes sense to pay this amount to avoid the cost. But, the important thing is if you want additional cash flow, you avail this facility, and it costs you," he added. In case of working capital, he said, three months interest will not be applied to the account but it will be applied immediately after the three months. In a note to customers, SBI said, "Interest shall continue to accrue on the outstanding portion of the term loan during the moratorium period". Explaining the financial burden with the help of an example, SBI said for a home loan of Rs 30 lakh with a remaining maturity of 15 years, the net additional interest would be approx Rs 2.34 lakh equal to eight EMIs for those borrowers who opt for the moratorium. "For an auto loan of Rs 6 lakh with a remaining maturity of 54 months the additional interest payable would be Rs 19,000 approx equal to additional 1.5 EMIs". Releasing frequently asked questions (FAQ) Indian Banks'' Association (IBA) said that borrowers whose incomes have not been impacted should pay their EMIs in time. "You may take the benefits under this (RBI) package if there is a disruption in your cash flows or there is loss of income. However, you must take into account that the interest on the loans, though not mandatorily payable immediately and gets postponed by 3 months, continues to accrue on your account and results in higher cost," IBA, an association of banks, said. To give you a perspective, it said, "suppose your loan outstanding is Rs 1,00,000 and you are charged 12 per cent rate of interest on your loan, then every month you are liable to pay Rs 1,000 as interest. In case you opt not to service the interest every month, you are liable to pay interest at 12 per cent per annum, and accordingly you will pay Rs 3,030.10 at the end of 3rd month". Similarly, in case the interest rate is 10 per cent, you are required to pay Rs 833 per month, or Rs 2,521 after three months, it added. Concerning credit card dues, IBA said, there is a requirement to pay a minimum amount and if it is not paid the same gets reported to Credit Bureaus but in view of the RBI circular, the overdue in the credit card account do not get reported to the credit bureaus for a period of three months. "However, interest will be charged by the credit card issuer on unpaid amount. You should check from your card provider to arrive at interest payable. Although no penal interest will be charged during this period, you must remember that the interest rate on credit card dues are normally much higher compared to normal bank credit and you should take a decision accordingly," it said. PNB Housing Finance said that there will be an increase in balance tenure by three months and a possible rise in EMIs for those customers opting for the moratorium. DP HV CS ANZ MRMR

You Searched For "Interest on Moratorium" and got 5 results

Supreme Court verdict on loan moratorium case deferred to November 5

PTI

Ujjivan Small Finance Bank sees shrinking interest and fee incomes due to loan moratorium this year

PTI

Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA

PTI

RBI ramps up economic support; cuts interest rates, extends loan moratorium

PTI

EMI moratorium: Borrowers unlikely to get significant gains; banks to charge interest later

PTI

Popular Keywords

Buying Guides