RBI extended the moratorium on loan payments for another 3 months to fight the ongoing COVID-19 pandemic by increasing liquidity in the economy. This moratorium at first was made available for a period of 3 months starting March to May.
But subsequently extended nationwide and people not able to carry on their economic activities made RBI to extend the moratorium by another 3 months. Accordingly, the total repayment period will also be extended by the same time frame. During the first moratorium period, the customers were confused over whether they should inform their respective banks over stopping their standing facility for the moratorium period if they wish to avail or will it be extended automatically.
To Overcome this challenge for customers SBI has decided to extend the facility to all eligible customers for three months. It also said that it has reached to all its eligible customers for receiving their consent over deducting EMI from their standing instructions. This will automatically withhold EMI payments on the loan for three month period of June, July, and August. Customers who receive the message should provide their consent for this.
SBI said on its statement “For this, the bank thas simplified the process of stopping the EMIs by initiating a short message service (SMS) communication to nearly 8.5 million eligible borrowers asking about their consent to stop EMIs. The borrowers have to reply with a yes to a designated virtual mobile number (VMN) mentioned in the SMS sent by the bank within five days of receiving the SMS, if they wish to defer the EMIs,”.
On May 22nd Rajnish Kumar, Chairman of SBI, said that 20% of its borrowers availed for the loan moratorium over the first three months.
The new measure was announced later the RBI governor Shaktikanta Das announce a 40 basis point reduction in the repo rate.
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