Coronavirus Epidemic is spreading across the globe with India being the latest to be affected by it. Dozens of citizens have lost their lives to the deadly virus with over 1000 plus infected. Indian Prime Minister Narendra Modi announced lockdown of the country till the 14th April 2020 to stop the further transmission of this virus. COVID 19 has severely affected economies with the closure of businesses, production units, loss of jobs among other financial losses. To provide economic relief to Indians, RBI has deferred payments on loans for the next 3 months.
The loans would include all type of retail loans ranging from a car to home to education helping the citizens tide over the economic crisis. In its statement released to the media outlets, the central bank said, “All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020.”
The RBI benefit will be available for any car loans outstanding as of 1st March 2020. There is no risk of being classified as a defaulter if you are rescheduling the payments that were due on your loan account. Your CIBIL score won’t be affected if you delay the payment for the next 3 months as RBI has classified that your loan account won’t be categorized as a non-performing asset.
According to the RBI statement, interest will continue to accrue on the outstanding portion of the term loans during the moratorium period.
* This is a developing story with more clarifications will be issued by the banks and the RBI in the coming days. We will be updating it.