SBI Extends Moratorium to Customers by Another 3 Months Amid Covid-19 Lockdown

The Coronavirus situation in the country appears to be an issue for the coming days. To tackle the various issues during the situation, the public and the private sector have been working hard. In order to bring a little order to the chaos, State Bank of India (SBI), the country’s biggest lender, has announced a big move.

On May, 27, 2020, the SBI declared that it has decided to extend the moratorium automatically by another 3 months in loan accounts of all eligible customers. According to an official statement, this move will be carried out without waiting for a request from the eligible customers.

The State Bank of India has reached out to all the eligible loan customers and have asked them to consent to stop their Standing Instructions (Sis)/National Automated Clearing House (NACH) mandate for the EMIs that will be due in June, July and August 2020. This move came after the Reserve Bank of India’s last week extended the moratorium for another three months in order to provide relief amid the Covid-19 situation.

However, the SBI has been seeking the consent of the eligible customers via SMS communication. The process has been simplified by sending SMS to nearly 85 lakh eligible customers and asking their consent to stop the EMIs.

How to Stop the EMI?

According to SBI, the customers will have to reply with a YES to a virtual mobile number (VMN) that will come within the SMS sent by the bank. The customers will be required to reply within 5 days of getting the SMS.

An individual’s equal monthly instalment (EMI) payment will not be deducted from their bank accounts. This will be a huge boon to the customers whose incomes have undergone major disruption ever since the lockdown which is now extended till May 31.

SBI Extends Moratorium to NBFCs

Another major move by the SBI was its decision to extend RBI approved moratorium to the non-banking finance companies (NBFC). On May 7, 2020, this move was undertaken to help them overcome the current crisis in the country.

According to a report, the SBI will extend the moratorium to NBFCs on a case-to-case Basis after a thorough assessment of their cash budgets and examining their need.

On May 4, 2020, RBI governor Shaktikanta Das reviewed the liquidity position of the micro, small and medium enterprises (MSMEs) and discussed a way to promote lending to them. This was undertaken with the representatives of NBFCs and Mutual Funds.

Various measures like the three month moratorium on repayment of loan instalments, the grievance Redressal mechanism was discussed.The NBFCs role in delivering last-mile credit was also addressed along with the discussion on the importance of mutual funds in financial intermediation, the RBI said in an official statement.

On May 2, 2020, The governor had also met various heads of the public and private sector banks and discussed extending help toward the MSMEs in India.

Conclusion

The recent decision by the SBI to extend the moratorium to customers is a big help to the masses. This will impact their spending ability positively and also help them to manage other expenses effectively.