What to do if after applying for moratorium EMI still gets debited

The Reserve Bank of India (RBI) on its fight against the economic impact of the outbreak of Covid-19 has announced a moratorium on term loans. On March 27, the RBI announced the three months moratorium. Given the current economic situation and as the country is under lockdown, trade and business are being shut down temporarily.

Loans which fall under the moratorium:

Borrowers may have several questions as to which type of loans fall under the moratorium issued by the RBI. All term loans like corporate loans, house loans, car loans and personal loans which include agricultural loans, crop loans and retail loans are included in the moratorium.

As per the RBI notification, it advised all banks to allow their customers to choose if they want to avail the moratorium or not. Bank’s customers can now choose whether to defer their payment that are due between 1^st March to 31^st May.

Meanwhile, some banks are giving customers options on whether they would go for the moratorium or continue with their EMI payments. Opting for the moratorium won’t affect customers credit score. On the other hand, while opting for moratorium, customers will have to pay additional interest for 3 months.

Banks notification to customers:

Banks have issued their own notification to customers regarding the moratorium

State Bank of India (SBI) will offer the moratorium only on customers demand. Customers have to email with their information if they want their EMI to be deferred or continue with payments.

IDBI Bank has already opt in all its customers for the moratorium. If one wants to continue they will have to email to the bank.

IDFC First Bank has given the moratorium to all its agricultural and rural customers. For other borrowers, the relief will be given only of the customers want it.

Kotak Mahindra Bank, PNB Housing, IndiaBulls Housing and Bajaj Finserv will provide the moratorium only when customers demand for it.

Central Bank of India, UCO Bank, Repco Home Finance, Punjab & Sind Bank, Deutsche Bank, Standard Chartered Bank and Bank of India has opted for automatic relief.

The RBI moratorium  which was announced on March 27 comes into effect for loans due starting March 1^st. Since most EMIs are paid in the mid of every month, most borrowers have already paid their EMI for March. Customers with due date before 5^th April may have also paid their EMIs. Notably this is as banks are taking some time to prepare the procedure for the moratorium. However, as most Banks are readied with their procedures, customers who are opting for the moratorium have received refund for their already paid EMIs.