27/03/2020
RBI on Term loans, WC - COVID 19
Moratorium on Term Loans
22. All commercial banks (including regional rural banks, small
finance banks and local area banks), co-operative banks, all-India
Financial Institutions, and NBFCs (including housing finance
companies and micro-finance institutions) (“lending institutions”) are
being permitted to allow a moratorium of three months on payment
of instalments in respect of all term loans outstanding as on March
1, 2020.
Deferment of Interest on Working Capital Facilities
23. In respect of working capital facilities sanctioned in the form of
cash credit/overdraft, lending institutions are being permitted to
allow a deferment of three months on payment of interest in respect
of all such facilities outstanding as on March 1, 2020. The
accumulated interest for the period will be paid after the expiry of
the deferment period.
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The moratorium on term loans and the deferring of interest
payments on working capital will not result in asset classification
downgrade.
Easing of Working Capital Financing
24. In respect of working capital facilities sanctioned in the form of
cash credit/overdraft, lending institutions are allowed to recalculate
drawing power by reducing margins and/or by reassessing the
working capital cycle for the borrowers. Such changes will not result
in asset classification downgrade.
25. The moratorium on term loans, the deferring of interest
payments on working capital and the easing of working capital
financing will not qualify as a default for the purposes of supervisory
reporting and reporting to credit information companies (CICs) by
the lending institutions. Hence, there will be no adverse impact on
the credit history of the beneficiaries.
D
