Two days back, the Reserve Bank of India (RBI) in a press conference announced a moratorium on the loans outstanding from March 1, 2020.
The RBI also announced a moratorium on loan repayment for 3 months starting March 31, 2020 is applicable on all types of retail credit, including credit card outstanding balances.
Meanwhile, District Magistrate of Gautam Budh Nagar, Uttar Pradesh BN Singh, has directed all landlords in his area that they can ask for rent from tenants only after a month.
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Moratorium on Credit Cards, Outstanding Balances!
The RBI aims ‘to mitigate the burden of debt servicing brought about by disruptions due to the Covid pandemic and to ensure the continuity of viable businesses.’
RBI issued the detailed instructions on the moratorium announcement on March 27. It also said, “The instalments include payments falling due from March 1 to May 31 such as the principal and/or interest components; bullet repayments; equated monthly instalments; and credit card dues.”
In respect of working capital facilities sanctioned in the form of cash credit/overdraft, lenders are permitted to suspend the recovery of interest applied in respect of all such facilities during the moratorium.
RBI said, “But the accumulated accrued interest shall be recovered immediately after the completion of this period.” This means that there is no real waiver on loan repayments but only postponing the burden. The borrower only gets a breather for three months to arrange or accumulate money to pay banks once the relief period is over.
Postponing the Rents?
Ever since the lockdown was imposed on March 23, thousands of migrant workers from Delhi have been walking to their home states as they have no place to stay.
According to the order by the DM, no tenant can be asked to vacate a house on the ground of failure to pay rent. Singh said in a tweet, “Landlords in Gautam Buddha Nagar can take rent from workers ( tenants) only after a month. No exodus of workers on rent ground will be allowed in present circumstances. Please ensure and cooperate.”
The order says there are majority informal sector workers living as tenants in Gautam Budh Nagar. The order also says, it has come to the administration’s notice that because of their inability to pay rent, many workers are being asked to vacate rented homes and, are therefore, forced to return to their home states. “In wake of the COVID-19 pandemic, it is important to protect these workers,” it adds.