EMI Moratorium: Action required from your end! What customers of private banks must know

State-owned and public sector banks have implemented RBI's EMI moratorium decision for their customers but if you are customers of private banks and non-banking financial companies (NBFCs), you will continue to pay EMIs on term loans unless a specific instruction is issued to them.

Several private banks and NBFCs informed their customers on Wednesday that auto debit facility for loan instalment won't be cancelled. If a customer wants to hold equated monthly instalments (EMIs) for three months, they will have to specify that by sending an e-mail to the bank/NBFCs.

ICICI Bank Customer?

"Relief package, #ICICIBank offers its customers a choice of either paying towards their loans/credit facilities or opting for a moratorium till May 31, 2020. Customers are requested to visit icicibank.com to specify choice," the private lender tweeted.

Good news for public sector banks' customers

However, most public sector bank have operationalised three-month moratorium without asking customers. Regular EMIs will continue once the customer specifies that he's willing to pay.

e-mail IDs for request

Other lenders, like HDFC Bank, Tata Capital, Edelweiss, Bajaj Finserv, RBL Bank, Adi's Bank, IndusInd Bank, Deutsche Bank, Rattanindia and Indiabulls, have announced specific email IDs where a customer will have to write to indicate the repayment choice.

With information on EMI deferment coming in April, most customers will get the deferment benefit of just two months (April and May) unless they have defaulted on paying the March instalment. Banks have also posted mailers and FAQs on their sites informing customers about the scheme.

Interest will continue to accrue

Many customers are expected to opt out of the EMI deferment as during the moratorium period interest will continue to accrue on the term-loan's outstanding. The interest accrued will be added to the outstanding and the repayment schedule for the residual tenor will be shifted across the board by three months after the moratorium period.

But you must take into account that under the scheme, interest on loans, though not mandatorily payable immediately, gets postponed by three months, continues to accrue, raising the loan cost.