The scheme will be applicable to all standard term loans under housing loan, loan against property, auto loan, education loan and personal loan as on March 1, 2020. It is intended to ensure the continuity of viable businesses. There may be a temporary disruption in the cash flows, and in some cases loss of income, for the businesses and individuals, the scheme will bring relief to such borrowers.
During the said moratorium period, interest shall continue to accrue on the outstanding portion of the term loan. The Interest accrued will be added to the outstanding loan amount at the end of the moratorium period and the repayment schedule for such loans will be reframed accordingly.
The Reserve Bank of India (RBI) has announced a three-month moratorium on all payments, including retail loans and credit card balances apart from corporate loans. Lenders brainstormed over how the policy can be implemented. Business Standard has earlier reported that banks
may face operational hurdles in implementing the policy. With branches and call centres working with skeletal staff, communicating to customers and documenting the process are some of the key challenges.