A slew of state-run banks, which control over two-thirds of the system, have gone for an “opt-out” option where the repayments automatically get deferred unless a customer informs of her willingness to pay. Experts have already made it clear that this is not an interest waiver, but a deferment of payments, meaning the additional interest costs will have to borne by the customers.
“If you do not want the EMI (earnest monthly installments) moratorium, no further action is required from your side. We will continue to bank your repayment instructions,” HDFC Bank
said on its website.
Kotak Mahindra Bank
asked customers to write to an email ID for “opting in” for the moratorium.
“The Bank would be charging the interest, at the original contracted rate, for the moratorium period on the outstanding amount of loan to all those who avail the relief as provided in the RBI circular,” it said.
Second largest lender ICICI Bank
took a different approach, wherein it has decided to make the moratorium as “opt-in” for the loans generally availed by salaried customers, while for loans taken by micro-borrowers and traders, whose cash flow may stand to get impacted, it is “opt-out”.
Accordingly, joint liability group or self-help group lending, jewel lending, unsecured business loans, dealer financing, overdrafts and credit cards will be in the “opt-out” category where the borrowers will have to inform the bank if they wish to continue paying, while other term loans will be under the “opt-in” category.
Third-largest private sector lender Axis Bank’s website said it is working towards implementing the scheme and added that customers will be informed about the details.