The decision of Reserve Bank of India to extend   moratorium for three more months upto August end for bank loan equal monthly instalments has been welcomed. Due to lock down induced by Covid 19 pandemic,  RBI had earlier issued an order on March 27 permitting commercial banks and cooperative banks to allow moratorium of three months on payment of term loans instalments. Since the lockdown is continuing, RBI had issued another order extending the moratorium for another three months till August 31 this year. RBI Governor said that exemption will be given from being classified as defaulter in reporting to credit information companies for the six month period till August.

Bank officials say that people should realise that the loan instalment moratorium is a grace period and not waiver of loan. Financial experts say that a person will not be blacklisted if they don’t pay the loan instalments or EMIs till August. RBI has given six months moratorium from March till August and the loanee can pay the instalments in September. There are advantages and disadvantages as the bank will charge interest for unpaid amount and extend loan by a certain period.

A senior manager of public sector bank said that this moratorium is a help for those who are unable to repay loan in this distress situation. However  they have to  give the repayment in a future date and interest will be applied. Those who have taken loans can claim for further instalments to pay the loans by requesting the bank. He advises people who are getting steady salary income to repay the instalment. They can finish the loan and can claim for further fresh loans. But for those who are not getting enough income during lock down period there is no other option other than opting for this moratorium benefit.

Shri Prabhakaran who had taken house building loan from a nationalised bank got the message saying that as covid 19 relief package,  instalments due in March to May 2020 have been rescheduled and next instalment is due in June 2020. Now with the new announcement of RBI, the next instalment for loan repayment will be due only on September after six months period of moratorium. But he immediately contacted bank authorities and said that he is not taking the moratorium option and is going to pay the instalments. However the loan instalment moratorium has definitely been a boon for those who don’t have a steady income during lockdown period. Truck drivers, small traders,  auto taxi drivers, tea stall owners who were badly affected by lockdown welcome government move to give extended moratorium to repay loans. Since they don’t have any cash in their hand to pay the EMIs they feel that this moratorium period will really help them. Shri Pandidorai who is a photographer says that this moratorium to repay loans till August end is really helpful. During lockdown there is no business and no income and thanks the government for giving time to repay loan. Sasikumar driver says that he is thankful to the government for giving six months moratorium.  He said due to lockdown he is not having any income and so he can repay loan only when he starts getting income when lockdown is over. Khajamydeen Tailor in Karur Kulithalai says that he has taken Rs 10,000 loan and got three months moratorium for repayment. Now he is thankful to central govt for giving three more months moratorium to repay instalments. Shahjahan petty shop owner from Karur Kulithalai says that he has taken bank loan. He thanks central government for giving first three months moratorium and again three months extended moratorium to repay loan instalments. Government is coming up with specific solution for every  problem faced by disadvantaged  people  due to covid 19 lockdown. Bank loan moratorium should be used judiciously considering the fact that the interest charges is not waived at all and the overall  repayment period will be extended further . 

K Devi Padmanabhan FPO Trichy

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