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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

<ul><li>The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword>’s (RBI) <keyword id="9861168" type="UNKNOWN" weightage="20" keywordseo="six-month-moratorium">six-month moratorium</keyword> came to an end on August 31, and payments are set to come due, starting today.</li><li>The Supreme Court is yet to announce its verdict on whether the interest accrued during that time will be waived, leaving many borrowers wondering what they should do. </li><li>Those who aren’t in a position to make payments, waiver or not, have the option to go for a one-time restructuring of loans.</li></ul>The Reserve Bank of India’s (RBI) pause on repayment of interest on loans for the past six months came to an end yesterday, August 31. Even though the government is yet to take a stand on whether or not the interest accrued during the moratorium period will be waived off, the payments for borrowers are going to start coming due from today. <div type="Article" hostid="261" msid="77758597" title="Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived" mstype="2" mssubtype="0"></div> As a borrower, you fit into one of three categories: <ol><li>Someone who didn’t avail the moratorium</li><li>Someone who availed the moratorium and is still facing financial difficulties</li><li>Someone who availed the moratorium but only for the sake of keeping liquidity on hand</li></ol>Someone who didn’t avail the moratorium If you’re a borrower that did not avail the moratorium facility offered by the RBI over the last six months, nothing changes. Your monthly payments continue as is, and there is no change in your overall loan payments scheme. Someone who availed the moratorium but can afford to pay Not everyone who availed the moratorium was facing a financial crisis. Someone did it to ensure that there was some extra cash on hand in case things took a turn for the worse. Even with the matter of interest waiver pending with the Supreme Court, banks are likely to recommend a one-time payment rather than letting interest accrue further. According to the RBI, an interest waiver could lead to a loss of ₹2 lakh crore for banks in India. “If you have taken a moratorium, the bank will suggest depositing as much amount as you can,” a bank manager at one of India’s leading public sector banks told Business Insider. According to them, even if the Supreme Court decides to waive interest, the amount will go towards advance loan paid. Someone who availed the moratorium and is still facing financial difficulties Not every business has been impacted equally during the coronavirus lockdown — some have taken a bigger hit than others. Take the tourism industry as an example. India’s gross domestic product (<a href="https://www.businessinsider.in/policy/economy/news/indian-economy-contracts-23-9-in-the-april-june-quarter/articleshow/77854401.cms">GDP</a>) data released yesterday shows how the trade, hotels, transport &amp; communications showed the biggest dip in real gross value addition (GVA). So, if you’re one of the many who is still not in a position to make payments, you have the option to approach your bank to restructure your loan. This could mean smaller payments over a longer period, an extension of the moratorium, or relaxation of interest rates. “We look at restructuring of loans as a last resort. It’s only for customers you really need it, and there are no other options left to explore,” said the source. <div type="Article" hostid="261" msid="77391894" title="If you have a bank loan that you are unable to pay, restructuring is on its way" mstype="2" mssubtype="0"></div> All types of loans, whether its a personal loan or a corporate loan, can apply for restructuring provided they meet the RBI's eligibility requirements — like you should not have defaulted on your loan payments as of 1 March 2020 or within 30 days of that day. The outstanding amount of debt at that point of time will be considered for restructuring. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/loan-moratorium-still-ends-on-aug-31-while-supreme-court-gives-the-government-another-week-to-clarify-if-accrued-interest-should-be-waived/articleshow/77758597.cms">Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived</a> <a href="https://www.businessinsider.in/tech/enterprise/news/rise-in-work-from-anywhere-will-lead-to-more-outsourcing-thats-an-opportunity-for-tcs-infosys-and-hcl-tech/articleshow/77864248.cms">Rise in 'work from anywhere' will lead to more outsourcing — that's an opportunity for TCS, Infosys and HCL Tech</a> <a href="https://www.businessinsider.in/stock-market/markets/news/dollar-index-is-at-a-two-year-low-and-heres-how-much-it-may-hurt-tcs-infosys-hcl-tech-and-others-if-it-stays-weak/articleshow/77843868.cms">Dollar Index is at a two-year low⁠ and here’s how much it may hurt TCS, Infosys, HCL Tech and others if it stays weak</a>

Loan repayments will become due starting today — here are the options that borrowers have

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

Mumbai, Apr 1 () Most of the private sector lenders have decided to go for the "opt-in" option on loan repayment moratorium, putting the onus on the customer to take the initiative of informing the bank of their choice to go for the three-month breather offered by the Reserve Bank of India. Largest private sector lender HDFC Bank said it would encourage customers with adequate funds to continue repayments to avoid the extra interest charges and tenor extension of the loan. The Reserve Bank last Friday announced a three-month moratorium on loan repayments in the wake of COVID-19 crisis for dues to be paid between March-May 2020 and left it to the bank to implement the same. A slew of state-run banks, which control over two-thirds of the system, have gone for an "opt-out" option where the repayments automatically get deferred unless a customer informs of her willingness to pay. Experts have already made it clear that this is not an interest waiver, but a deferment of payments, meaning the additional interest costs will have to borne by the customers. "If you do not want the EMI (earnest monthly installments) moratorium, no further action is required from your side. We will continue to bank your repayment instructions," HDFC Bank said on its website. Kotak Mahindra Bank asked customers to write to an email ID for "opting in" for the moratorium. "The Bank would be charging the interest, at the original contracted rate, for the moratorium period on the outstanding amount of loan to all those who avail the relief as provided in the RBI circular," it said. Second largest lender ICICI Bank took a different approach, wherein it has decided to make the moratorium as "opt-in" for the loans generally availed by salaried customers, while for loans taken by micro-borrowers and traders, whose cash flow may stand to get impacted, it is "opt-out". Accordingly, joint liability group or self-help group lending, jewel lending, unsecured business loans, dealer financing, overdrafts and credit cards will be in the "opt-out" category where the borrowers will have to inform the bank if they wish to continue paying, while other term loans will be under the "opt-in" category. Third largest private sector lender Axis Bank's website said it is working towards implementing the scheme and added that customers will be informed about the details. AA DRRDRR

Loan moratorium: Most pvt banks go for "opt-in" option

In line with the RBI guidelines, <keyword id="6357149" type="COMPANY" weightage="20" keywordseo="hdfc-bank">HDFC Bank</keyword> is offering its customers EMI moratorium and credit card outstanding moratorium as a relief measure. We understand in this current situation there may be disruptions in business leading to low cash flows or the earnings of individuals and self-employed professionals may have been impacted. Our aim through implementing this relief package is to ensure that you can continue to take care of your family, your business and your own self and tide over this temporary situation,” the bank said in a statement. Here are the FAQs and complete details of the EMI moratorium package and ways to avail of it. 1. What is the EMI moratorium provided for loans under COVID 19 - regulatory package? The prevailing situation may pose a huge challenge for people at large. As a measure of solidarity, RBI permitted all Indian banks and financial Institutions to offer its customers up to 3 months moratorium on their EMI payments falling due between Mar 1st, 2020 to May 31st, 2020. 2. Who is eligible? All HDFC Bank customers who have availed of retail instalment loan or any other retail credit facilities prior to 1st March 2020 are eligible. Customers having overdues prior to 1st March 2020 may also opt for the moratorium, and their requests shall be considered by the bank based on its merits. All Agri Loans (Kisan Gold Card) and Microfinance customers under the Bank’s Sustainable Livelihood Initiative are also eligible. All Corporate as well as SME customers are also eligible. The bank’s relationship managers will get in touch with you or you can contact them to get further details. 3. What will happen if I choose the EMI Moratorium? Bank will not ask for any EMI Payment till May 31st 2020. Interest will continue to accrue on the principal outstanding for the period of the moratorium at the contracted rate of the loan.The loan tenure will get extended by the corresponding period for which the moratorium has been availed. For example, if the EMI for the month of Mar’2020 has been paid and moratorium for April and May’2020 has been availed, then the loan tenure will be extended by 2 months. 4. If I do not want the EMI moratorium, what should I do? If you do not want the EMI moratorium, no further action is required from your side. We will continue to bank your repayment instructions. We encourage customers with adequate funds to continue paying during this period to avoid the extra interest charges and tenor extension. However, if you skip your EMI payment during this period, it is understood that you require EMI moratorium till May 2020. 5. Why was my account debited when the RBI has announced a moratorium? Opting for the moratorium is entirely the customers’ choice. We understand that all our customers may not opt for the moratorium given that there is an additional levy of interest payable under the terms of the moratorium. If you wish to opt for the moratorium, banks can refund the EMI debited and register your loan account under the moratorium process. 6. What charges will I pay, if I avail of this EMI moratorium? If you avail the EMI moratorium, there will be a levy of interest at the contracted rate of the loan for the period of EMI moratorium on the loan outstanding. Such interest will be collected by extending the original tenor of the loan accordingly. 7. How do I get this EMI moratorium? You will have to provide your consent to the bank through any of the following ways:- Call on this number and follow the instructions – 022-50042333, 022-50042211 , 8. I have more than one loan from HDFC Bank (Eg. Personal Loan &amp; Car Loan). Can I get EMI moratorium for both the loans? Yes, you can opt for an EMI moratorium for each loan that you have availed from us. Please remember that additional interest for the EMI moratorium period will be applicable for each loan separately. 9. What if I have already paid my EMIs and would like to avail the moratorium till 31st May 2020? You can avail of the moratorium benefits for the unpaid EMIs. Please follow the process given above for availing the moratorium 10. Does the moratorium affect my Credit Rating? No. Opting for the EMI moratorium will not affect your Credit Rating or Score. 11. Does this moratorium apply for Credit Card outstanding and Loans on Credit Cards? Yes, the moratorium is available on Credit Card outstanding and Loans availed on Credit Cards for payments due from 01 Mar 2020 till 31 May 2020. The moratorium allows you to defer the payment till 31 May 2020. You are required to pay the minimum amount due or total outstanding and accrued interest charges on the due date after 31st May 2020. 12. Are all credit card customers eligible for this moratorium? Yes. All retail credit card customers will be deemed eligible for the moratorium if they are regular with their payments on or before 01st March'20 on their credit card outstanding and loans taken on the credit card 13. How do I avail the credit card moratorium? To avail the credit card moratorium, (a) voluntarily defer paying the outstanding during this period i.e. make NIL payment (b) turn off Auto Pay (in case the same is currently availed) through net banking / mobile banking to avail the benefit of the moratorium and reactivate the same post the end of moratorium period. 14. Will interest be levied for the moratorium period on my credit card outstanding and loan on credit cards? Yes, interest will be levied as per the contracted rate on the card. Opting for a 3-month moratorium allows you to defer the payment of your credit card dues and loan instalments taken on credit cards till 31st May 2020. We encourage customers to make full payments towards the outstanding wherever possible to avoid / minimise levy of interest charges for this period. Kindly note that the moratorium is a deferment of payment and not a waiver of interest. You are required to pay the minimum amount due or total outstanding along with accrued interest charges on the due date after 31st May 2020. The moratorium is applicable for credit facilities availed in India. See Also - <a href="https://www.businessinsider.in/india/news/how-to-avail-three-month-moratorium-for-icici-bank-emi-and-credit-cards/articleshow/74941936.cms">How to avail three-month moratorium for ICICI Bank EMI and credit cards</a>

You Searched For "moratorium loan interst waiver" and got 5 results

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

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Loan repayments will become due starting today — here are the options that borrowers have

Prabhjote Gill

Supreme Court verdict on loan moratorium case deferred to November 5

PTI

Loan moratorium: Most pvt banks go for "opt-in" option

PTI

Can I defer my credit card payments and FAQs on HDFC Bank’s moratorium process answered

BI India Bureau

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