Bank of Maharashtra Moratorium Extension: From June to August 2020
Due to the continuing impact of the COVID-19 pandemic in India, Bank of Maharashtra has decided to extend the moratorium period for further 3 months. Earlier, the scheme was applicable from 01.03.2020 till 31.05.2020. Now there will be an extension of the moratorium from 01.06.2020 to 31.08.2020.
This scheme is especially implemented for those borrowers whose finances have been impacted due to lockdown disruptions by COVID-19. Those who have regular cash flow have to continue with the regular EMI.
The 6 months moratorium (01.03.2020 to 31.08.2020) is available for loan instalments/ deferment of interest on credit cards. The relief covers Agri, Retail (Home Loan, Education Loan, Vehicle Loan), MSME, and Business & Corporates. The bank will be increasing the repayment tenure of these loans with applicable rate of interest. Availing this facility will not affect the credit score of the beneficiary.
Customers who wish to avail this relief have to follow the below process:
Type BOM <<space>> EMIDEF and send it to 57575 from your registered mobile number.
Bank will keep honouring the standing instruction unless the borrower withdraws. The borrower is free to make payments as per their existing arrangement.
✅ What relief has the RBI provided under COVID 19-regulatory package for loan accounts?
RBI has given permission to the Bank to provide a moratorium of 6 months (3+3) to all the loan accounts, which are in the category of standard assets as of 01.03.2020 and for which EMIs are falling due between 01.03.2020 and 31.08.2020. As a result, the bank will not demand instalment during this period and borrowers need not pay the instalment during the same period if they wish to. Accordingly, the remaining repayment tenure will be extended across the board by 6 months (3+3). Bank will keep honoring the standing instructions unless the borrower opts for the relief.
✅ Whether I should necessarily take the benefit of the COVID 19-regulatory package?
You may take the benefit under this package only if there is a negative impact on your cash flows or there is a loss of income. You must keep in mind that the interest on the loans continues to accrue on your account for these 6 months and results in a higher cost.
✅ Is rescheduling of Term Loans applicable only for principal amount or interest also?
Rescheduling of principal can be done for a period of 6 months (3+3) falling due between 01.03.2020 and 31.08.2020. For example, if the last instalment of your Term Loan falls due for payment of on let’s say 01.03.2020, it will become payable on 01.09.2020. For EMI based Term Loans, it will be 6 EMIs falling due between 01.03.2020 and 31.08.2020 and the tenure will be extended by 6 months to be repaid during the extended period.
In the case of other Term Loans, it will be all the instalments along with interest falling due during the same period, irrespective of the tenure of payment. If repayment of Term Loans has not started, the interest portion for 6 months (falling due between 01.03.2020 and 31.08.2020) alone needs to be reckoned.
✅ What process do I need to follow to get the benefit of instalment moratorium?
The scheme is uniformly applicable on all standard term loans that are outstanding as on 01.03. 2020. Borrowers don’t have to raise any separate request.
✅ What happens after the end of the moratorium period?
For loans other than working capital facilities, interest will continue to accrue on the outstanding amount of term loans during the moratorium and will be added in the outstanding loan amount, which might lead to a marginal change in EMI. After completion of the relief period, the repayment schedule and the residual tenure of such loan will be shifted across the board by 6 months.
For working capital facilities, to reduce the difficulties faced by borrowers in repayment of accumulated interest for the deferment period in one shot, it is now allowed to convert the accumulated interest on those working capital facilities (up to 31.08.2020) into a funded interest term loan (FITL) which will be repayable not later than 31.03.2021).
✅ Does availing this moratorium period impact my credit rating?
✅ What if my loan repayment is to be started after 31.08.2020?
In such a case, the package is not available, which is still under the moratorium period up to 31.08.2020. If the sanction letter stipulates interest servicing during the moratorium, then deferment of such interest from 1st March 31st August 2020 is extended and a suitable repayment schedule will be planned.
✅ How will the interest on the Working Capital facilities be treated?
In order to reduce the difficulties faced by borrowers in repayment of the accumulated interest for the deferment period in one go, the bank has permitted to convert such accumulated interest (up to 31.08.2020) into FITL, which shall be repaid before 31.03.2021.