Indian Overseas Bank Announced COVID 19 – Regulatory Package for Term Loans & Pension Loans
The Indian Overseas Bank (IOB) in terms of COVID 19-Regulatory Package offers moratorium/deferment of instalments/EMIs for Term Loans falling due from 01.03.2020 to 31.08.2020.
The bank has also announced a special credit facility for pensioners as COVID19 relief measures for meeting unforeseen expenses due to the pandemic. The scheme is called the IOB INSTA PENSION (COVID-19 RELIEF) LOAN and it covers all pensioners (excluding pensioners of Malaysian Government receiving pension through IOB branch).
✅ Is the deferment of instalments of Term Loan, Home Loan, etc. automatic?
Yes, it is automatic. However, the borrower has an option to avail this facility or not. If you do not want to avail the facility, you will have to give a request to the home branch.
✅ On which loans this scheme is applicable?
It is applicable on all Retail Term Loans, Agriculture, MSME, Credit Cards, and Cash Credit/Overdraft.
✅ Will this moratorium affect my credit score?
No. Accounts will be not treated as NPA and the moratorium will not affect the CIBIL score as well. No penalty will be levied on deferred instalments and interest.
✅ What will happen to the interest/EMI during 6 months of the moratorium?
Interest will be accrued during these 6 months, i.e., from 01.03.2020 to 31.08.2020. Interest on instalments of term loans and working capital (CC/OD) will be deferred and the interest will also be accrued. Customers will have to pay additional interest on deferred instalments of their term loans and interest on working Capital (CC/OD).
✅ Will the banks rephase this additional interest accrued on deferred instalments?
No. Customers have to pay additional interest accrued on deferred instalments of term loans. For working capital (CC/OD), the accrued interest has to be paid by 30.09.2020 and if the monthly interest is not being applied, it has to be paid in the next interest date.
✅ Are the RBI guidelines applicable to the loans instalments falling up to 29.2.2020?
No. The guidelines are applicable only for the instalments and interest falling from 01.03.2020 to 31.08.2020.
✅ Will instalment already debited for March 2020 be refunded?
It can be done as per the request of the customer.
✅ Will the original repayment period extend?
Yes. The original repayment period will be deferred by 6 months. For example, if the original repayment period of the loan is 60 months, now it will be extended to 66 months.
✅ What if I don’t want to avail this facility?
In that case, you have to submit the request to the home branch.
✅ How will the credit card dues be treated?
The amount due falling from 1st March to 31st Aug 2020 will be deferred automatically. The total amount with interest will be payable on 10th Sep 2020.