Good news! Now, insurers too can grant moratorium on term loans - All details here

Good news for borrowers! Insurance Regulatory and Development Authority of India (Irdai) has permitted insurance companies to grant a moratorium of three months on payment of term loans in line with the Reserve Bank's directions. The decision was taken after the Reserve Bank of India announced a moratorium for borrowers of term loans in the wake of the imposition of lockdown to fight coronavirus outbreak across India.

Irdai has already provided additional time period for policy holders to pay their renewal premium as people may find it difficult to make payments owing to the ongoing lockdown.

Request accepted!

In a circular, Insurance Regulatory and Development Authority of India (Irdai) said it has received representations from industry associations, seeking moratorium on repayment of term loans sanctioned by the insurers in the context of outbreak of Covid-19. The regulator has accepted the request.

"In respect of term loans, insurers are permitted to grant a moratorium of three months towards payment of instalments falling due between March 1, 2020 and May 31, 2020," it said. The repayment schedule for such loans and also the residual tenor, will be shifted across the board by three months subsequent to the moratorium period, it added.

Interest will continue to accrue

Irdai, however, added interest will continue to accrue on the outstanding portion of the term loans during the moratorium period.

Further, the asset classification of term loans will be determined on the basis of revised due dates and revised repayment schedule.

"The rescheduling of payments, including interest, will not qualify as a default for the purpose of reporting of NPAs," Irdai added.