What RBI's Relief Package Means For You

Borrowers gain from rate cut, but think twice before claiming the moratorium

- Radhika Merwin

The RBI has come out with a slew of measures to tackle the impact of Covid-19 on the economy. A sharp cut of 75 bps in repo rate to 4.4 per cent, a series of liquidity measures and a moratorium on term loans — all will have an impact on borrowers and depositors in the coming months.

Moratorium relief

In a bid to ease the pain of banks and borrowers, the RBI has provided a three-month moratorium on payment of instalments on terms loans (outstanding as on March 1). Payment of all instalments — principal and/or interest components, bullet repayments, Equated Monthly Instalments and credit card dues — falling due between March 1, 2020, and May 31, 2020 -- will be eligible for the relief.

This means that you can opt for a three-month relief on your loan repayments to ease the strain on your finances.

But there are several things to keep in mind.

One, EMIs are normally executed through banks’ auto-debit facility. With the month coming to an end (and most EMI payments usually set for the beginning of the month), your EMI for March may already have been debited from your account. If you wish to claim the RBI relief, you may contact your bank to reverse the auto-debit transaction.