SBI Loan Moratorium: State Bank of India (SBI), India's largest lender has good news for its customers, amid coronavirus crisis. SBI Bank has announced all its term loan borrowers a three-month moratorium for its customers under the terms of a COVID-19 RBI package announced on Friday. This comes days after Reserve Bank of India (RBI) allowed all lending institutions -- banks and housing finance companies will have to give its borrowers a three-month moratorium on 'term loans'. SBI customers were wondering since RBI's announcement whether their loan EMIs will automatically get deferred or will they have to apply. SBI has now made it clear about what it is going to do with loan EMIs for its customers.
Making the big announcement, the State Bank of India tweeted: "In terms of RBI COVID-19 regulatory package, SBI has initiated steps to defer the instalments and interest/EMIs on Term Loans falling due between 01.03.2020 to 31.05.2020 and extended the repayment period by 3 months. The interest on Working Capital facilities for the period 01.03.2020 to 31.05.2020 is also deferred to 30.06.2020." It must be noted that interest will be deferred and not waived during the three month EMI pause. Effectively, this order is EMI moratorium is a relief measure if you have a cash crunch and not something that you should avail if not needed now.
SBI's term loan moratorium will bring relief to all borrowers, including those who have home loans, auto loans, education loans, agricultural term loans, retail and crop loans to their names. It will also be applicable on credit card dues. Besides retail borrowers, micro, small and medium enterprises and large companies will also benefit from the RBI's relaxation of loan repayment.
The scheme would be available to all borrowers having standard account with the bank, meaning they have no record on default in the past.
Bank has also issued mailers and put FAQs on their sites informing the customers about the scheme.
The Reserve Bank Governor Shaktikanta Das on Friday announced a three-month moratorium on EMIs of all term loans due during March 1 to May 31 and said that the repayment schedule for all those loans would be shifted by three months after the moratorium.
Here're key points of SBI 3-months moratorium:
State Bank of India's (SBI) moratorium on loan EMIs. These are details as published on the bank's website.
- SBI has initiated steps to defer the installments and interest/EMIs on Term Loans falling due between 01.03.2020 to 31.05.2020 .
- Accordingly, the total repayment period will be extended by 3 months over the original repayment period.
| Particular |
Course of Action |
| Customer who do not want to defer recovery of instalments /EMI |
No action is required. They may continue to pay in usual course. |
| Customer who wants to defer recovery of instalments/EMI |
- NACH – Where collections of such instalment / EMI is effected through National Automated Clearing House (NACH), please submit an Application (Annexure-I) along with mandate for NACH Extension-(Annexure-II) to stop NACH for these instalments through an e-mail to the specified email ID (Annexure-III).
- Standing Instructions (SI) – Please submit an Application (Annexure-I) through an email to the specified email ID (Annexure-III).
|
| Customers who want refund of the instalment/EMI already paid |
Please submit an Application (Annexure-I) through an email to the specified mail ID (Annexure-III) |
Effecting deferment of EMI/NACH/Refund may take approximately 7 working days
However, here's the part that you would like to know. How will the EMI pause affect your loan? Will you have to pay extra for your loan if you opt for EMI deferment?
Impact of Deferment as per SBI NOTICE: To enable you to take an informed decision, we furnish hereunder the impact of deferment:
Interest shall continue to accrue on the outstanding portion of the Term Loan during the moratorium period. The possible impact of the extension of the repayment period has been explained below:
- Impact in case of Auto Loan – For a loan of Rs.6 Lacs with a remaining maturity of 54 months the additional interest payable would be Rs.19,000 approx. equal to additional 1.5 EMIs.
- Impact in case of Home Loan – For a loan of Rs.30 Lacs with a remaining maturity of 15 years, the net additional interest would be approx. 2.34 Lacs equal to 8 EMIs.
Also Read: Big relief for SBI customers! Bank says, 'All term loan EMIs automatically deferred by 3 months'
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