Lost your job or had salary cut? This RBI decision can help you
Last few months have been tough for the salaried class. On one hand, there was the growing fear of COVID-19 pandemic and on the other, several companies were left with no choice but to implement salary cuts or let go of people.
Last few months have been tough for the salaried class. On one hand, there was the growing fear of COVID-19 pandemic and on the other, several companies were left with no choice but to implement salary cuts or let go of people. The government came up with several initiatives to help during the crisis including an EMI moratoriums on loans. So, if you fall in any of the above categories, then the latest decision from RBI can be of huge help.
The Reserve Bank of India (RBI) on Thursday permitted banks to go for a one-time restructuring of loans that are facing stress due to the COVID-19 crisis with a view to mitigating risks to financial stability.
Under the one-time restructuring, customers may get more respite on repayment of your personal loan – including home loan, car loan, education loan, gold loan, loan against securities, etc – if you have lost your job, suffered losses in your business or source of your income has dried up.
"With the intent to facilitate the revival of real sector activities and mitigate the impact on the ultimate borrowers, it has been decided to provide a window...to enable the lenders to implement a resolution plan in respect of eligible corporate exposures without a change in ownership, and personal loans, while classifying such exposures as standard, subject to specified conditions," RBI said in its Statement on Developmental and Regulatory Policies.
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The benefit will be extended to only those who took the loan before March 31, 2020, and have not defaulted in paying any equated monthly instalment (EMI) till March 1, 2020.
"The resolution plan for personal loans under this framework may be invoked till December 31, 2020, and shall be implemented within 90 days thereafter," the RBI statement said.
The shorter timeline for personal loans is assessed to be adequate since unlike larger corporate exposures, there will not be any requirement for third-party validation by the expert committee, or by credit rating agencies, or need for inter-creditor agreement (ICA), it added.
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