Offering great relief to its borrowers amid the coronavirus outbreak, three commercial lenders, namely State Bank of India, Canara Bank and IDBI Bank have offered a three-month moratorium on term loan installments to their borrowers.
Country’s largest lender SBI, the country’s largest lender has said that it has initiated steps in a bid to defer equated monthly installments (EMIs) and interest on term loan likely to be due on between March 1 to May 31 and extend the repayment period by three months. The interest on working capital facilities for the given period has also been extended by three months, it said.
Besides, SBI has reduced interest rate by 75 basis points to pass on the complete rate cut benefits to its borrowers availing loans linked to external benchmark linked lending rate (EBR) and repo linked lending rate (RLLR).
Canara Bank has also announced that its customers can now avail three-month moratorium on term loan instalments and interest payments/EMIs falling due on March 1 to May 31, while repayment period will get extended accordingly.
Moreover, IDBI Bank has offered its customers with a moratorium on term loan instalments and interest payments for a period of three months valid up to May 31, 2020. However, customers, whose cash flows is uninterrupted, can pay as per the existing schedule.
The decision is likely to offer major relief to customers, especially middle-class borrowers.
Similarly, other lenders are also likely to offer deferment on payments of instalments for all term loans to provide some cushion to individuals, businesses facing major challenges in the wake of the 21-day lockdown announced by the government.
The development came after the Reserve Bank of India (RBI) directed all banks and lending institutions to provide a three-month deferment on payments of instalments for all term loans that were outstanding as on March 1.