In order to provide much-needed relief to the borrowers, the Reserve Bank of India (RBI) has announced- moratorium extended by RBI on loan repayment by an additional 3 months, i.e. till August 2020. This is to assist them during the financial disturbance caused due to the COVID-19 lockdown. The moratorium means relaxation to repay the loan after the deadline.
Moratorium extended by RBI on Loan Repayment
On March 2020, the RBI had given a 3-month moratorium on reimbursement of all term loans due from March 2020 to May 2020.
“Taking into account the further extension of the lockdown and proceeding with disturbances because of Coronavirus, RBI has decided to further extend the moratorium on term loan by additional 3 months, i.e. from June 1 to August 31, 2020”, RBI governor Shaktikanta Das has stated.
Besides, RBI had previously reduced Reverse Repo Rate.
Impact of the Loan Moratorium extended by RBI
Because of this moratorium, borrower’s loan EMIs won’t be deducted from their account. This will increase the necessary liquidity for the borrowers who are suffering the problem of cash crunch because of the lockdown 4.0, which is till May 31. The advance EMI instalments will begin as soon as the moratorium time lapses on August 31.
Loan repayment by the borrowers
For borrowers who get this moratorium relief, EMIs will be extended with the interest liability on the principal amount during the non-EMI period.
This is the loan moratorium-extended latest news given by RBI amid the nationwide lockdown 4.0 to stop the spread of the COVID-19 infection. The RBI had given additional moratorium over and above the previous moratorium of payment on loans, as on 27th March 2020.
The moratorium-extended latest news comes 2 months post the RBI had allowed respite on the reimbursements in the EMI from March 1 to May 31.
In its prior declaration, the Central Bank stated that the accumulated interest for the period will be paid after the expiry of the moratorium time frame.
However, the businessmen need to show complete ITR filing for availing any business loan from a bank. The government has already extended the due-date of ITR filing till 30th June 2020.
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