The Govt. of India & RBI had made available a three month loan moratorium due to the COVID19 pandemic in March 2020. How do you get it? Let’s take a look.
What is a moratorium?
A moratorium period is a period during a loan term when the borrower is not obligated to make a payment. It is a waiting period before the borrower starts making fixed monthly payments.Bankrate.com
And here is the rule from RBI.
Here is the actual rule from Reserve Bank of India. Source – COVID19 Regulatory Package, RBI dated March 27, 2020
In respect of all term loans (including agricultural term loans, retail and crop loans), all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies) (“lending institutions”) are permitted to grant a moratorium of three months on payment of all installments falling due between March 1, 2020 and May 31, 2020. The repayment schedule for such loans as also the residual tenor will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.RBI
So, basically what that means is RBI is giving all banks in India, the permission to grant a moratorium of three months on payment of all instalments due in March to May, 2020.
What it means
So, if you had taken a home loan, auto loan or any such loans from the banks in India, you can get the moratorium and needn’t pay the EMIs in these three months (March to May).
What it doesn’t mean
It doesn’t mean that you automatically can stop payments without letting the bank know.
The RBI has given permission to the banks to offer a moratorium to its customers. Now, the bank can decide whom to make it available for.
In fact, most banks in India, now have an RBI Moratorium application process, where you have to apply for the moratorium and upon approval, you can defer the EMI payments for three months.
Unfortunately, many people in India are still under the impression that they don’t have to pay the EMIs.
If you have contacted the bank, given the moratorium application – then yes you can stop payment. But if you haven’t done anything, then by default you have to pay the EMIs regularly.
How to get loan moratorium
So, how do you get the loan moratorium?
Well, the process is pretty much straight forward for all banks, but with minor differences.
First and foremost, you have to contact the bank asap and let them know of your situation. You can do that by email, phone or direct visit.
Second, most banks have online applications available for moratoriums. I’ve given the popular ones below, so you can follow the instructions there.
You have to give your loan number, KYC details and apply online.
Upon approval, you shall be eligible to skip payment for three months.
HDFC Limited – https://portal.hdfc.com/
HDFC Bank – https://apply.hdfcbank.com/vivid/afp?product=mo
State Bank of India – https://bank.sbi/stopemi
In almost all applications, you have to give your loan number and KYC details, so have them in hand already.
Also, it might be a good idea to double-check with the bank, either via phone or Twitter or through someone you know at the bank, whether your moratorium case has been approved or not.