RBI Moratorium- Should you pay home loan EMI for the next 3 months?

The RBI has cut the repo rate by 75 basis points and the repo rate now stands at 4.4 per cent. This move comes after central banks across the world announced rate cuts to fend off a COVID19-related recession.

In what could be a huge relief to those staring at loss of income due to the coronavirus lockdown across the country, The Reserve Bank of India in a press conference announced that all banks and NBFCs have been permitted to allow a moratorium of 3 months on repayment of term loans outstanding on March 1, 2020.

Here are some of your questions answered.

Will my home loan EMI be deducted from my account next month?

The 3 month moratorium on repayment means borrowers would not have to pay the loan EMIs during the moratorium period. As per the RBI statement, availing the moratorium will not affect the borrower’s credit rating or affect the risk classification of the loan.

SBI, ICICI, Canara Bank and others take up RBI permit, defer EMIs for 3 months

However, individual banks need to allow the suspension of EMIs. The borrower has to request the bank that his income has been affected by the COVID19 disruption. If you do not have a specific approval from your lending bank, your EMI will be deducted from your bank account.

Does the moratorium cover both principal and interest?

Yes it does. However, it has to be approved by your bank, as mentioned in the previous answer.

Are credit card payments covered under the moratorium?

No. Only term loans are covered under the moratorium and credit cards being termed as revolving credit, they are not covered.

Will it affect my CIBIL score?

Availing the moratorium will not affect the borrower’s credit rating or affect the risk classification of the loan.

What other loans apart from home loan are covered under the moratorium?

All term loans which have a fixed tenure are covered. This includes personal loans, car and bike loans, education loan etc.