Kotak Mahindra Bank Announced a Relief of 6 Months Moratorium for Its Borrowers
Following the advice of RBI on giving moratorium for customers to help them sail through this tough time brought by coronavirus lockdown, the Kotak Mahindra Bank has also announced a policy for providing the said relief to its borrowers.
This policy is applicable to all credit facilities sanctioned and disbursed by the bank and outstanding as on 31.03.2020. The relief is not applicable to loan to be disbursed in April 2020 and thereafter. It will also apply to all GIFT City branch borrowers (subject to applicable laws) and foreign currency denominated facilities of the bank’s domestic offices/branches.
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The bank will offer the moratorium facility to all borrowers who wish to avail of it (for term loan instalments as well as credit card dues falling due between 01.03.2020 and 31.08.2020) and/or deferment of interest for March to August 2020 to all the borrowers who have availed working capital facilities.
The interest will be charged at the original contracted rate, for the 6-months moratorium period on the outstanding loan amount to all customers who avail the relief. The accumulated interest has to be paid by the customers as mentioned in this policy.
Customers who want to avail this relief can send an email to firstname.lastname@example.org from their registered mail id quoting the Loan account or APAC number.
As per the new circular of RBI, dated 23.05.2020, the bank has extended the moratorium for further 3 months, i.e., from 01.06.2020 till 31.08.2020. You can opt for the new extension of moratorium by clicking on the link https://www.kotak.com/en/covid-19/installment-moratorium.html.
For Details Regarding the New Updates Click on the Link Below: Kotak Mahindra Bank Increases Moratorium on Term Loan Instalments and Credit Card Dues Till 31st August, 2020
✅ What are the terms and conditions for moratorium for Term Loans?
- The repayment schedule of term loans will be increased by up to 6 months and the tenure will be commensurately extended. The instalment/EMIs amounts will be appropriately recalculated, including the interest during moratorium.
- If you’ve already paid your instalments or serviced your interest for March 2020, you can avail moratorium for instalments falling due in April to Aug 2020.
- The bank will be collecting the payment through the post-dated cheques or actioning ECS/NACH mandates, etc., provided by the customers as per the respective due dates.
- Credit card customers can also avail the relief under the RBI circular. Instructions will be sent along with their first statement falling due on or after 01.04.2020. Customers who don’t pay their total amount due in the months of March, April, May, June, July and August will be automatically enrolled for the moratorium.
✅ What are the relief for working capital facilities?
- Deferment of interest: For Overdraft/ Cash Credit cases (including KCC Loans), deferment of interest will be offered by the bank to all borrowers for the months of March, April, May, June, July and August 2020. If your account is overdrawn or becomes out of order during the moratorium period, the deferment of interest will automatically be applied from such date. You must service the accumulated interest for the deferment period immediately after the moratorium period.
- Reduction of margin: Customers who are facing financial stress during the COVID-19 pandemic, the reduction of margin will be considered by the bank on stocks/receivables/other eligible securities, for the computation of Drawing Power (DP) for OD/CC limits & allow higher DP than earlier, on the basis of the impact on borrowers. Such reduction of margin will be valid in respect of all changes effected up to 31.08.2020 for a period assessed by the bank or extended time as per the impact assessment done by the bank on customer’s working capital cycle. After this period, the margin will be reverted to pre-relief margin as stipulated by the bank.
- Reassessment of working capital limits/cycle: The bank may reassess the working capital limit/cycle factoring the COVID19 impact on affected customer’s business. If the working capital arrangement is under a Consortium, the bank will harmonize the reassessment of limits with the assessment of the Lead Bank of the Consortium. When the original limit is reinstated, any further concession/enhancement will be dealt with as per the usual restructuring norms by RBI.
✅ Who is eligible to avail the above-mentioned relief for reduction of margin and reassessment of working capital limits/cycle?
The relief is available to all borrowers who avail working capital facilities in the form of:
- Bill discounting/ Gold Metal Loans/ Letters of Credit/ etc.,
Whose working capital requirement / cycle is impacted by the pandemic, resulting in:
- Deferment/cancellation/rescheduling of orders
- Shutdown of unit or workplace
- Non-availability of manpower/sale of goods or services/transportation to complete the manufacturing.
- Non-realization of debtors/elongation of realization period
The said relief will be granted subject to meeting the bank’s credit assessment.
✅ What are the common conditions for availing the policy?
- The bank will assess the stress on the borrowers by pandemic
- The customer should not be under IBC proceedings
- The customer should not have been classified as a willful defaulter/RFA/Fraud classified by KMBL/other banks .