New RBI guidelines on loan moratorium
The current uncertainty caused by the Corona epidemic is not only related to health, but it has also caused financial losses. The 6-month loan moratorium ends on 31 August 2020. Even when the period of the moratorium was continuing, there were different things about further increasing the tenure, levying interest during the period of the moratorium, and the total financial instability occurring through it. By reaching the Supreme Court, the uncertainty still remains in the mind of the general borrower.
Let us know about RBI’s new guidelines on loan moratorium and what options the lender currently has.
Legal status at present
There is no hope of moving beyond the deadline of August 31, 2020, before the moratorium period has passed. The concession was taken well initially but later lost its luster. The Moratorium came to such a situation at a time when they were disrupting the financial functioning of the bank and NBFC and causing instability and shortage of cash. The loan holders were also not benefiting much because their interest liability was getting compounded.
But this does not mean that your options as a borrower are over. Realizing the economic difficulties faced by the epidemic, RBI has offered a one-time debt solution window on its behalf which will help the lenders without disturbing the cash flow of the banks. This settlement plan has been announced during the Prudential Framework of June 2019, which allows lenders to implement a resolution plan. RBI is confident that the new debt solution framework will cover about 50 to 55 per cent of the banking system, including personal loans as well as small business loans.
Where the RBI is offering this framework, the final decision will be taken by the Supreme Court when it will hear the case related to Moratorium on 28th September.
With RBI allowing lenders to restructure, loan holders will be allowed to take advantage of the loan restructuring option once it is ready. Under the scheme, a person will be able to take advantage of the Moratorium for two years by restructuring his loan.
Ability to resolve new debt
RBI has set some qualifications if you want to opt for a new debt solution.
First, the financial impact due to an epidemic should have a direct relation to the impact on the repayment of your loan. So if you have lost your job or lost business, you can take the new facility.
Along with this, the loan should not be left for more than 30 days on 1 March 2020.
Once the loan structure is final, if you are eligible under the scheme, you can go to your bank. While restructuring the loan will not affect your credit score or CIBIL, it will be reported.
(By Nisary M, Founder, Hermoneytalks.com)
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