Deutsche Bank Offers 6 Months Moratorium on Term Loans, Overdraft Against Salary & Working Capital Facilities

Deutsche Bank Offers 6 Months Moratorium on Term Loans, Overdraft Against Salary & Working Capital Facilities

Deutsche Bank has offered 6 months moratorium period for the payments of Term Loans, Overdraft Against Salary, and Working Capital Facilities. It was done in reference to the RBI’s (Reserve Bank of India) Statement of Development & Regulatory Policies released on 27.03.2020 and 23.05.2020, where certain regulatory measures were declared to lessen the burden of debt servicing caused by disruptions due to COVID-19 pandemic and to ensure the undisrupted continuity of viable businesses.

Below are all the questions with their answers regarding the measures taken by Deutsche Bank for its customers:

FAQs

✅ What does Deferment of Interest mean on Working Capital Facilities?

With reference to RBI’s Regulatory Packages dated 27.03.2020 and 23.05.2020, wherein some regulatory measures were declared to reduce the burden of debt servicing caused by disruptions due to COVID-19 pandemic, and for viable businesses, Deutsche Bank will defer the recovery of interest applied on all Overdraft/ Cash Credit facilities during 01.03.2020 up to 31.08..2020. This means that for Overdraft/ Cash Credit facilities utilised between the said dates, the interest will not be collected immediately at respective month end, but instead, it will be collected cumulatively by the end of the deferment period.

✅ How can I avail of the benefits of this Interest Deferment?

Deutsche Bank has offered Interest Deferment benefit to all its customers who had availed Cash Credit or Overdraft before 01.03.2020. The bank extended Interest Deferment automatically to all Cash Credit and Overdraft facilities, without any communication received by the customer for the same.

Only if a customer did not wish to avail of this benefit, they had to contact the bank through the provided modes.

With the RBI’s Regulatory Package dated 23.05.2020, the bank has now extended this interest deferment till 31.08.2020 automatically to all those clients who had availed this facility for the period 01.03.2020 till 31.05.2020.

In case you availed the Interest Deferment by the bank during 01.03.2020 till 31.05.2020 and you did not opt out of it, the deferment will continue till 31.08.2020.

If you had opted out of the deferment during 01.03.2020 till 31.05.2020, the deferment for the extended period i.e., 01.06.2020 till 31.08.2020 will not be automatically offered to you. However, you can avail of the same now by requesting the bank.

✅ Is the bank providing the Interest Deferment to all customers or is there any exception?

The Interest Deferment is being provided to all those clients who have availed Cash Credit and/or Overdraft Facilities before 01.03.2020. Below are the exceptions where interest deferment relaxation is not available:

  • Customers who have a payment overdue to the bank before 01.03.2020, i.e., customers who did not pay their dues for 90 or more days as on 29.02.2020.
  • Accounts that are not categorized as ‘Standard’ as on 29.02.2020. Non-Performing Assets (NPAs), including non-financial reasons, will be excluded from the deferment.

✅ By which date can I inform the bank that I want to opt out of Interest Deferment?

Clients who had availed the benefit of interest deferment for 01.03.2020 till 31.05.2020 and want to opt out of it for an extended period (i.e., who want to pay interest on a monthly basis for 01.06. 2020 till 31.08.2020), need to inform the bank latest by 20.06.2020.

If you had opted out of the interest deferment for 01.03.2020 till 31.05.2020, it is the default option for you and the bank requires no further actionable from you.

✅ By which date can I inform the bank that I want to opt in for the Interest Deferment?

Clients who had availed the benefit of interest deferment for 01.03.2020 till 31.05.2020 and want to opt in the benefit for the extended period (i.e., who want to defer interest on a monthly basis for 01.06. 2020 till 31.08.2020), need to inform the bank latest by 20.06.2020.

If you had availed the interest deferment for 01.03.2020 till 31.05.2020, it is the default option for you and the bank requires no further actionable from you.

✅ Does non-payment impact my credit history?

No. Non-payment will not have any impact on your credit history, unless you have not opted out of the deferment of interest. However, the non-payment of any earlier interest will impact your credit history. Make sure you pay all dues timely to keep your credit history clear.

✅ Is the bank waiving my interest altogether?

No. This is a deferment and not a waiver. Interest will continue to accrue for each calendar month on the amount utilised for that month during the deferred period. That means the accrued interest will be levied on the account when the deferment period ends. The accumulated accrued interest will be recovered after this period gets completed (i.e., on 30.09.2020).

However, if you had availed of the interest deferment during 01.03.2020 till 31.05.2020 and do not want to avail it for the extended period, i.e., for 01.06.2020 till 31.08.2020; the accumulated interest for the previous period will be recovered on June 30, 2020. Monthly interest will be levied for each month from June 2020 at the end of every calendar month in line with the pre-agreed terms and conditions.

✅ Do I have to pay all interest in one go when the deferment period ends?

Yes. However, it is recommended to read the scenarios below for a better understanding of the applicability of interest.

  • If you have not opted in for interest deferment for the extended period of June to August but did avail it during the initial period, i.e., from March to May 2020, the bank will levy the interest on the utilisation done during the initial deferment months along with that of June 2020 to your account on 30.06.2020. Make sure to fund your account towards interest servicing.
  • If you had opted in for deferred interest benefit only for the extended period and had opted for monthly interest payment option during the initial deferment period, the bank will levy interest on the utilisation done in the deferment months (i.e., June, July, and August 2020) along with that of September 2020 to your account on 30.09.2020. Make sure to fund your account towards interest servicing.
  • If you have availed of the interest deferment benefit for the extended period as well as for the initial period, the bank will levy the interest on the utilisation done in the deferment months (i.e., from March till August 2020) along with that of September 2020 to your account on 30.09.2020. Make sure you fund your account towards interest servicing.

✅ I had availed of the Interest Deferment in April to May 2020, but now I have enough cash flows to service my interest regularly during the extended period, i.e., from June to August 2020. Can I opt out of the extended Interest Deferment and service my Interest like before?

If you wish to opt out of the extended Interest Deferment, you can write to your relationship manager/ service manager from the registered email address mentioning your Customer ID number and the details of the facility for which you want to continue servicing the interest. You can also send SMS to 561615 from your registered mobile number.

Keep in mind that the last date for opting out of the interest deferment extension is 20.06.2020. In this case, the bank will levy the interest for the initial deferred month (April to May 2020) along with that of June 2020 on 30.06.2020. Make sure that your account is sufficiently funded for the same.

✅ I had opted out of the benefit of Interest Deferment for April to May 2020, but now I want to opt in for it for the extended period (June to August 2020). Can I opt in for the Interest Deferment extension?

For this, you will need to write to your relationship manager/ service manager from the registered email address mentioning your Customer identity number along with the details of the facility for which you do not wish to continue servicing the interest. You can also send an SMS to 561615 from your registered mobile number on or before 20.06.2020. In this case, the bank will levy the interest for the extended deferred month (June to August 2020) and that of September 2020 as well on 30.09. 2020. Make sure that your account is sufficiently funded for the same.

✅ Will the bank provide any assistance to help us meet the interest demand at the end of the said deferment period?

If you have opted for the interest deferment for March to August 2020 or only for the extended deferment period (June to August 2020), the bank will set up a loan facility (FITL) for you to pay the interest for the deferred period. Funded Interest Term Loan (FITL) is an interest bearing loan with an EMI (comprising of the principal amount and the interest) to be repaid within 6 months. The interest rate of this FITL will be the same as your Overdraft or Cash Credit facilities on 20.09.2020 and will remain fixed for the loan, notwithstanding any changes in the interest rate of your Overdraft or Cash Credit facilities.

✅ Will the bank provide any assistance to help us meet the interest demand at the end of the said deferment period if I have availed of the interest deferment in March to May 2020, but want to opt out of it during the extended deferment period?

No. In that case, the FITL is not available. FITL can be availed only if you have availed interest deferment for the initial and extended deferment periods i.e., from March to August 2020, or availed interest deferment only for the extended deferment period of June to August 2020.

✅ Will the bank disburse FITL into my account by default?

No. Although, the FITL is pre-approved for you, you will have to sign a term sheet and agree to avail this facility. For this, contact your Relationship Manager/ Service Manager who can assist you with the documentation process to avail the FITL.

✅ What if I am eligible for the FITL, but do not want to avail the FITL loan? Can I opt out of it and continue to service my interest?

Yes. If you want to opt out of the FITL loan and wish to pay the interest at the end of the deferment period, i.e., on 30.09.2020, you can write to your relationship manager/ service manager from the registered email address mentioning your Customer identity number along with the details of the facility for which you want to opt out of the FITL. You can also send SMS to 561615 from your registered mobile number.

✅ How can I avail the moratorium extension if my loan is already on moratorium?

Deutsche Bank has offered moratorium extension by default to all its customers who are already on a moratorium. For all such loans, the moratorium will be extended automatically, without any communication received by the customer. Only if you do not wish to avail the moratorium, you need to contact the bank via the available modes.

✅ Are all customers eligible for the moratorium or is there any exception?

All customers of the bank who have availed Term Loans/ Working Capital Facilities before 01.03. 2020 are eligible for the moratorium. The only exceptions are those customers who are already in a delinquent state as on 01.03.2020.

✅ What if our loan was marked NPA earlier this year, but we have paid all dues on our loan account in May and there are no outstanding dues now? Will our loan be eligible for a moratorium now?

No. Since this is an extension of the previous moratorium announced on 27.03.2020 with qualification criteria set as 01.03.2020, customers who have now regularised their accounts cannot avail of the moratorium facility for Phase 2.

✅ What are Term Loans?

Term Loans are those loans that have a definite tenure and that are repaid through equated monthly instalments (EMIs). At Deutsche Bank, Term Loans include all variants of Loan against Home, Home Loan, Property Purchase Loan, Loan for or against Commercial Property, Business Instalment Loan, Unsecured Business Loan, and Personal Loan. These loans may be offered on floating or fixed interest rates.

✅ Will I be eligible for the moratorium if I have availed a term loan or working capital facility after 01.03.2020?

No. As all loans and facilities that were availed before 01.03.2020 are allowed to be offered with the moratorium, you will not qualify for the same.

✅ Will the bank waive off my EMIs altogether?

This is a deferment and not a waiver. Interest will continue to accrue on the outstanding part of the term loan during the moratorium period. That means the accrued interest will be applied to your loan in September and the bank will adjust your repayment schedule suitably.

✅ Do I have to pay all EMIs altogether in September?

No. The bank will revise your EMI according to the revised repayment schedule, w.e.f September 2020. The bank will execute the EMI/ Tenure change in the most optimal manner to minimise the impact on its clients. The new repayment schedule for your loan will be available in September. Contact the bank at that time if you require the same.

✅ Does this moratorium cover principal and interest both?

Yes. The moratorium applies to both principal as well as the interest component of your loan availed from Deutsche Bank before 01.03.2020. Loans availed on or after that date are excluded from this facility.

✅ Does the bank offer moratorium for both retail and business loans?

Yes. The moratorium covers all term loans availed from Deutsche Bank.

✅ Does this moratorium apply to my loan if my loan is currently on a Pre-EMI?

This moratorium applies to all Term Loans, including the loans that are currently being serviced through pre-EMI mode. The bank will provide the revised repayment schedule for your loan in September.

✅ Can I opt out of the moratorium if I have sufficient cash flows and can pay my EMIs regularly going forward?

To opt out of this moratorium, send SMS to 561615 from your registered mobile number or you can call the phone banking team of the bank at 18602666601. You can also write to the bank at premium.care@db.com.

✅ What if I had opted out of the moratorium earlier, but now I want to avail it as per extended timelines?

Customers who had opted out of moratorium earlier or whose loans are eligible for but currently not on Moratorium can avail the moratorium for the extended period (June, July, and August 2020). For this, send SMS to 561615 from your registered mobile number or you can call the phone banking team of the bank at 18602666601. You can also write to the bank at premium.care@db.com.

✅ How do these SMS keywords work?

By sending an SMS to 561615, you are allowing the bank to offer moratorium and stop EMIs for the months of June, July, and August 2020 on all loans availed from the bank, linked to your customer ID. Keep in mind that you will not be able to selectively avail or opt out of the moratorium via this SMS channel.

✅ If I have multiple active loans with Deutsche Bank, will opting out resume the EMIs on all these loans? Can I avail this moratorium on selective loans while opting out of the moratorium for the rest?

For such cases, you can contact the phone banking team of the bank on 18602666601 or write to them at Premium.Care@db.com with your requirements.

✅ How do I opt out of the moratorium for an Overdraft against Salary linked to my Savings Account?

You can do so by sending an SMS to 561615. By doing so, you are instructing the bank to continue normal interest servicing on all loans or facilities availed through the bank, linked to your customer ID.

✅ My firm has a Working Capital facility and I have a Home Loan on my name with Deutsche Bank. Will opting out continue the EMIs on all the loans or facilities? Can I avail of this moratorium on selective loans?

All term loans where the bank has tagged the mobile number as a primary communication mode, will be registered for availing or opting out of moratorium. You will not be able to selectively avail or opt out of the moratorium through the SMS channel. For selective opting in or opting out of moratorium, you can contact your Relationship Manager or bank’s phone banking team on 18602666601 or write at Premium.Care@db.com with your requirements.

✅ By when can I communicate my decision to the bank about opting in/out of the moratorium?

You need to convey your decision latest by 15.06.2020, otherwise, it will be considered that you want to continue with the existing arrangements on your loan(s).

 

Also Read: Is Your Bank Offering Six Months’ EMI Moratorium Till Aug 31? Check List

 

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