The Supreme Court`s order, dated September 3, 2020, was operational on all lending institutions/banks throughout the country and was passed in favour of all borrowers accounts to grant relief from financial stress during the COVID-19 pandemic, Tiwari said in the petition.
Banks need to closely monitor asset quality, prepare for higher provisioning: RBI
SECTIONS
Last Updated: May 27, 2021, 05:00 PM IST
Share
Synopsis
The waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020 may put stress on banks financial health. The apex bank, however, expressed confidence that banks are better positioned than before in managing stress in their balance sheets in view of higher capital buffers, improvement in recoveries and a return to profitability.
The waiving of interest on interest charged on loans during moratorium period (March 1, 2020 to August 31, 2020) may also impinge on lending institutions finances. (Representative image)
How individual borrowers can use RBI’s second loan moratorium offered due to coronavirus
SECTIONS
Share
Synopsis
Any default on repayment not only leads to higher cost in terms of interest and penalties but also impacts one’s credit history negatively which reduces future creditworthiness. Moratorium helps such borrowers in keeping their credit history intact even after skipping repayments and restructuring loans for the specified period.
Getty Images
RBI Loan Moratorium 2021
In view of the difficulties faced by individual borrowers during the second wave of pandemic the RBI has asked lenders to allow a second moratorium. Eligible borrowers who did not use the first loan moratorium offered last year can avail of the second one and those who did avail of the first one can get the moratorium period extended. The RBI governor made this announcement on May 5, 2021 as part of an unscheduled speech to announce measures to tackle the second wave of Covid-19.
URL copied
RBI announces loan moratorium to individuals, small borrowers - Check eligibility
RBI on Wednesday allowed certain individual and small borrowers more time to repay debt and allowed banks to give priority loans to vaccine makers, hospitals and COVID-related health infrastructure as it announced support measures to cushion the pandemicâs blow on the economy.
Moratorium eligibility
The moratorium of up to two years will be available to individuals and small and medium enterprises that did not restructure their loans in 2020 and were classified as standard accounts till March 2021, RBI Governor Shaktikanta Das in an unscheduled address. This facility will be available to borrowers with a total exposure of Rs 25 crore.