India biggest public sector lender the State Bank of India (SBI) is expanding the moratorium relief in adherence to RBI’s recent order on 3 months further extension for loan accounts of all eligible customers without waiting for them to request.
So far, public and private banks have given either an “opt in” or “opt out” mechanism, or a mix of both options on the basis of borrower profiles, for extending the relief to customers. In a statement, SBI also stated that the extension of the moratorium and deferment of EMIs would “offer some relief to the borrowers amid COVID-19 outbreak.”
The lender said that it reached out to its 85 lakh eligible borrowers for obtaining the consent to stop standing instructions for EMIs due in June, July and August 2020 on the basis of which the relief is extended. Further, SBI added that it had simplified the process of stopping EMIs, noting “The borrowers have to reply with a YES to a designated virtual mobile number (VMN) mentioned in the SMS sent by the Bank within 5 days of receiving the SMS, if they wish to defer the EMIs.”
FD rate cuts
SBI, in a separate notification, also slashed Fixed Deposit (FD) rates by 40 bps across all tenors. The revised rates will be effective from May 27, 2020. This is the second time the PSB has revised its rates in the month of May.
As per the revised rates, an FD with a one year tenor will draw a rate of interest of 5.10%, as compared to a rate of 5.50% earlier. A similar rate of interest is also applies to FDs of more than 1 year and less than 2 years tenure, and also for FDs of more than 2 years, but less than 3 years.
The rate of change will also be applicable to FDs of more than 3 years and less than 5 years, and also of FDs with a tenor of more than 5 years, upto 10 years – where the rate of interest shall reduce from 5.70% to 5.30% annually.