SBI extends loan EMI moratorium: Here are all the details

The Reserve Bank of India (RBI) extended the moratorium on loan EMIs by three months, i.e., till August 31, 2020. The earlier three-month moratorium was ending on May 31. This makes it a six-month moratorium on term loan EMIs starting from March 1, 2020 to August 31, 2020.

The country's largest PSU lender, the State Bank of India (SBI) has extended the moratorium on loan EMIs automatically by another three months in loan accounts of all eligible customers without waiting for their request. According to the bank's press release, it has "proactively reached out to all of its eligible loan customers to obtain their consent to stop their Standing Instructions (SIs) / NACH mandate for the EMIs falling due in June, July and August 2020."

SBI has said that it has simplified the process of stopping the EMIs by initiating an SMS communication to nearly 85 lakh eligible borrowers asking about their consent to stop EMIs.

Borrowers will have to reply with a 'YES' to a virtual mobile number, which will be mentioned in the SMS, within 5 days of receiving the SMS if they want to defer their EMIs.

Here is a look at the details of SBI's loan EMI moratorium according to its website.

In terms of RBI COVID 19 regulatory package dated 27.03.2020, SBI had initiated steps to defer the instalments and interest/EMIs on Term Loans falling due from 01.03.2020 to 31.05.2020. Further, following RBI's directives dated 23.05.2020 extending the moratorium for another 3 months falling due from 01.06.2020 to 31.08.2020 on payments of all instalments in respect of term loans, the moratorium period of all eligible Term Loan account is being extended by the bank for further 3 months. Accordingly, the total moratorium period in all eligible term loan account will be extended by 6 months.

The bank is also proactively reaching out to all of its eligible loan customers to obtain their consent to stop their Standing Instructions (SI) /NACH mandate for the EMIs falling due from 01.06.2020 to 31.08.2020. For this, the bank has simplified the process of stopping the EMIs by initiating a SMS communication to all eligible customers to stop EMIs. The process of giving the consent will be as under:

Options for customer
Customers who do not want to defer recovery of instalments /EMI
No action is required. They may continue to pay in usual course.

Customers who wants to defer recovery of instalments/EMI

• Standing Instruction (SI): SMS Reply to VMN within 5 days from the receipt of SMS.
• NACH: SMS Reply , (Where 1234 is the last 4 digits of their loan A/c no) to VMN within 5 days from the receipt of SMS.

You may not receive the SMS in case your mobile number is different from the number registered with the bank. In such cases you may please contact your branch and submit your request as per Annexure -I

Impact of deferment
Interest shall continue to accrue on the outstanding portion of the Term Loan during the moratorium period. The possible impact of the extension of the repayment period has been explained below:

Impact in case of auto loan

• Those who availed the first 3 months deferment and want to avail further deferment for 3 months: For a loan of Rs.6 Lacs with a remaining maturity of 54 months the additional interest payable would be Rs.36,000 approx. equal to additional 3 EMIs
• Those who would like to avail this deferment benefit for the first time: For a loan of Rs.6 Lacs with a remaining maturity of 54 months the additional interest payable would be Rs.19,000 approx. equal to additional 1.5 EMIs.

Impact in case of home loan

• Those who availed the first 3 months deferment and want to avail further deferment for 3 month: For a loan of Rs. 30 Lacs with a remaining maturity of 15 years the additional interest payable would be Rs.4.54 approx. equal to additional 16 EMIs.
• Those who would like to avail this deferment benefit for the first time: For a loan of Rs. 30 Lacs with a remaining maturity of 15 years the additional interest payable would be Rs.2.34 lac approx. equal to additional 8 EMIs.

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