Salaried borrowers continue EMIs, ignore moratorium offer
Bankers say that most MSMEs, though, have opted for it
- The option of a moratorium on loan repayments announced by the Reserve Bank of India last month has mostly been availed of by micro, small and medium enterprises while salaried class borrowers have, till now, largely refrained from it.
- Some private sector lenders, including housing finance companies, however, are still entertaining requests from their customers on the moratorium issue.
- RBI announced that banks and other financial institutions would give an option to borrowers of term loans for deferring payment of instalments falling due between March 1 and May 31, 2020.
- The move was aimed at addressing the liquidity crunch faced by businesses and individuals due to the economic lockdown imposed to help contain the COVID-19 pandemic.
- About 85-90% of businesses in the MSME sector have availed of the loan moratorium. This was expected as their business is down and [they] are facing a liquidity crunch.
- Borrowers opting for the moratorium would have to incur a cost as the interest not paid in these three months would be added to the principal component.