RBI extends Loan Moratorium by 3 Months from June 1

MLoan Moratorium - RBI - Taxscan

The Reserve Bank of India ( RBI ) has extended the Loan Moratorium by three months from June 1st, 2020.

In his third such address since the coronavirus outbreak began on March 25, RBI Governor Shaktikanta Das today cut the repo rate by 40 basis points to 4% and also extended a moratorium on all term loans by another 3 months.

After the lockdown began, Das had slashed the benchmark interest rate (repo rate) by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown.

The RBI has also increased the export credit period to 15 months from 1 year.

The RBI Governor had announced the decision to permit financial institutions to grant 3 months moratorium on term loans and deferment of interest on working capital. On April 17, the RBI clarified that the moratorium permitted by it on March 27 due to the COVID-19 situation can be excluded from the 90-day period for Non-Performing Assets(NPA) classification of accounts which were standard as on March 1.