IDBI Moratorium 2.0 on Term Loans: June to August 2020
IDBI Bank, in the wake of coronavirus pandemic and its huge impact on borrowers, had earlier offered a relief to its borrowers by providing a moratorium of 3 months on term loans till 31.05.2020, covering all standard term loans under housing loan, personal loan, loan against property, education loan, and auto loan.
The bank, in line with the Reserve Bank of India’s new circular, has decided to go with the continuation of COVID 19 Relief Measure. The scheme is initiated to help borrowers mitigate their burden of debt servicing during the COVID-19 pandemic and for continuity of viable businesses.
The scheme will bring some relief for the individuals/businesses who are suffering from the temporary disruption of cash flows, and even loss of income in some cases. Borrowers who still have regular cash flow should continue with the regular EMI.
✅ What relief has the RBI provided for retail loans under COVID 19 – regulatory package?
RBI, in its guidelines, dated 23.05.2020, has permitted banks to extend moratorium by another 3 months, i.e., 01.06.2020 to 31.08.2020 on instalments payments of term loans. Hence bank will not demand instalment during this period and borrowers who are availing this relief measure are not required to pay the instalments during these 3 months. Accordingly, the repayment tenure for such loans and the remaining tenure will be shifted across the board.
✅ If I have already availed moratorium, do I need to opt out of the same again for the period June to August 2020?
No. You are not required to raise a separate request for recovering EMIs for June to August. EMIs will continue to be recovered by the bank.
✅ How can I get the benefit of instalment moratorium?
The scheme is applicable to all standard term loans under home loan, loan against property, education loan, auto loan, and personal loan as on 01.03.2020, for borrowers who have already opted for a moratorium during the period of March 2020 to April 2020 to May 2020.
✅ How will the bank adjust my loan since I will not be paying instalments?
During the moratorium period, the bank will continue to accrue interest on the outstanding amount of the term loan. The interest accrued during the moratorium period will be added to the total outstanding loan amount at the end of the said moratorium period and the remaining repayment tenure for such loans will accordingly be shifted across the board.
✅ What will happen after the moratorium is completed?
Interest will continue to accrue on the outstanding part of the term loans during the said moratorium period and will be added in the outstanding loan amount. The repayment schedule of such loans will be revised. This may result in either increase in EMIs or an increase in repayment tenure of the loan or both.
✅ What will happen to those accounts which are delinquent, in default, or overdue on or before 1st March 2020?
The instalments (or other amount) overdue on or before 29.02.2020 in any loan account will have to be paid to avoid down-gradation of account and credit rating in the future.
✅ Does the non-payment of EMIs during this moratorium period affect my credit rating?
✅ What is the last date for opting out of the moratorium relief scheme?
The last date for opting out of the relief scheme is 08.06.2020.
✅ Will this scheme be applicable to term loans availed after 01.03.2020?
No. The loan account disbursed after 02.03.2020 will not be covered under this scheme.
✅ What if my cash flow not impacted in the COVID-19 pandemic and as a result, I do not want to avail further moratorium?
Customers who have availed moratorium for up to May 2020 and now want to start EMI recovery from June 2020 should request the bank to recover EMIs by applying through the IDBI Bank website at https://moratorium.idbibank.com/ or by replying to the SMS sent from the bank for this purpose. After receiving such requests from the customers, their EMIs will be recovered by the bank.
✅ Will the bank levy any late payment charges or additional interest on the unpaid instalment during the moratorium period?
No. The bank will not levy any charges or additional interest for the accounts granted moratorium relief during the moratorium period.
✅ Will this moratorium period be considered for Education Loan wherein moratorium is already availed as per scheme?
- If the loan is currently under moratorium under the scheme, moratorium relief will not be applicable.
- For education loans where the borrower has opted to pay interest during the moratorium, the moratorium relief will be applicable on the interest payment during the period.
- For education loans wherein EMI has already started, the moratorium relief is available on the instalments payable during 01.03.2020 to 31.05.2020 and between 01.06.2020 to 31.08.2020 unless customer opts out.
✅ If I have availed Loan Against Property Overdraft (LAPOD) or Loan Against Securities (LAS) from the bank, will the moratorium relief scheme be applicable for these loans?
For working capital facilities given in the form of LAPOD or LAS accounts, bank can allow deferment of interest payment accrued during moratorium period, i.e., 01.06.2020 to 31.08.2020. You can avail moratorium relief by submitting a request to the nearest branch/Retail Asset Centre of the bank through an email. The deferred interest amount will be recovered upfront after the moratorium period ends. Alternatively, the accrued interest can be converted into another loan, i.e. Funded Interest Term Loan or FITL, which will be recovered in EMIs to be fully repaid by 31.03.2021. Such FITL will also carry interest.
✅ If I have paid my EMIs during March to May 2020 but now facing financial crunch due to COVID -19 pandemic, can I avail moratorium scheme now for June 2020 to August 2020?
Yes. You can do so by submitting a request through an email to the nearest branch or Retail Asset Centre of the bank. The request should contain all details, such as borrower’s name, loan account number, customer ID, and months for which moratorium is required.