RBI asks banks to offer moratorium to all, unless the borrowers choose to opt
Several banks are providing the option to defer the payment of loan interest and principal only to borrowers, who were particularly asking for it
The Reserve Bank of India has asked the banks and non-financial companies (NBFCs) to offer three-month moratorium by default to all the borrowers, unless they (borrowers) chose to opt out of it.
As per reports, several banks are providing the option to defer the payment of loan interest and principal only to borrowers, who were particularly asking for it. However, the RBI has clarified that the three-month moratorium should be provided to all the borrowers, unless they themselves convey the bank/ NBFC of not availing the facility.
The new directive would make things difficult for banks that lean more on credit deposits to keep cash flow steady, and would not see much inflow from the lower cash reserve ratio (CRR) and bond sales. According to Bankers the move is not in line with the March 27th circular which had asked banks to conduct the moratorium as per “board-approved policies” and, in effect, left it up to individual banks to decide.