Moratorium 2021 I How are the moratorium rules on loans announced by RBI in 2021 different from those of last year?

How are the loan moratorium rules announced by RBI in 2021 different from last year How are the loan moratorium rules announced by RBI in 2021 different from last year? | & nbspPhoto credit: & nbspBCCL

In view of the second wave of Covid-19, the Reserve Bank of India (RBI) announced the Resolution Framework (RF) 2.0, modeled on measures announced last year, to help those financially affected by the pandemic.

While this is a bit far from the call for further relief measures announced by the central bank on May 5, 2021 as a “ second moratorium, ” Governor Shaktikanta Das has authorized an extension of the moratorium period for those who took advantage in 2020. Those who did not take the fig leaf from the central bank last year have been allowed to restructure their loans in the event of financial difficulties.

Distressed borrowers who opted for a moratorium of less than two years under RF 1.0 can now opt for a two-year extension.

“For individual borrowers and small businesses that have benefited from the restructuring of their loans under resolution framework 1.0, where the resolution plan authorized a moratorium of less than two years, credit institutions are allowed to use this window to modify these plans where possible. increase the duration of the moratorium and / or extend the remaining duration to a total of 2 years. The other conditions will remain the same, ”said Das.

The moratorium refers to the postponement of repayments that are added to the principal amount. When such as the borrower begins the repayments, the repayment term and in some cases the EMI increase.

Eligible borrowers who did not take advantage of the facility in the first round but are having difficulty repaying debts due to various Covid-19 issues can turn to their lenders to restructure their loans.

Borrowers, i.e. individuals and small businesses and MSMEs who have not taken advantage of the restructuring facility under Resolution Framework (RF) 1.0 announced in August 2020, and whose accounts are classified as “ standard ” as of March 31, 2021, can benefit from it. However, this is limited for borrowers with outstanding debt of Rs 25 crore or less. This means that there should be no default before March 31, 2021 in order to benefit from the relief measures announced under RF 2.0.

Eligible borrowers including small businesses, MSMEs (micro, small and medium enterprises) and individuals who opt for restructuring under RF 2.0 until September 20, 2021. Banks are expected to implement the same within the 90’s. days after the invocation.

New directives under RF 2.0

While the moratorium announced under RF 1.0 relates to an overall deferral of payments for the duration of the moratorium, the new measures under RF 2.0 relate to the restructuring of loan conditions to take into account flexible repayment conditions. This may include rescheduling payments, converting any interest accrued or accrued in another credit facility, revisions to working capital sanctions, granting a moratorium based on an assessment of cash flows. income. However, compromise settlements are not allowed.

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