Big relief for borrowers! RBI extends loan moratorium by another 3 months till August 31

Giving a major relief to borrowers, the Reserve Bank of India (RBI) Friday extended the loan moratorium by another three months till August 31. Zee Business had reported that the RBI MPC can take a call on EMI relief in today’s press conference. The move will help several borrowers during the ongoing coronavirus crisis where people are facing cash crunch.

The moratorium announced by RBI earlier was set to end on May 31. But, now the borrowers will have the option to delay payments for June, July and August as well. This means that they do not have to pay EMI on loans for these months.

The loan moratorium will be extended till 31 August, said RBI governor Shaktikanta Das. This makes it a six month moratorium. He added that the lending institutions are being permitted to restore the margins for working capital to the origin level by 31 March, 2021. 

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The other major announcement came in the form of reduced repo rate. RBI cut the repo rate by 40 basis points to bring it down from 4.4 per cent to 4 per cent, giving a major relief to borrowers. The move announced by RBI governor Shaktikanta Das during a press conference, will both home and auto loan borrowers.

Das informed that the Central Bank’s Monetary Policy Committee Met earlier that scheduled in the wake of COVID-19 crisis and voted in the ratio of 5:1 in favour of the repo rate cut. 

The Reverse repo rate stands reduced to 3.35%.

The RBI governor praised his team and said that the Central Bank has been proactively working to deal with the current situation. RBI maintained accommodative stance, while saying that inflation will remain firm in the first half of 2020 but ease later on.