FAQs-RBI Covid-19 Regulatory Package -Instalment Moratorium
In line with the RBI circular no. DOR.No.BP.BC.47 / 21.04.048 / 2019-20 dated March 27, 2020, certain regulatory measures has been introduced by RBI to mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure the continuity of viable businesses.
We at Edelweiss Finvest Private Limited (hereinafter referred to as “EFPL” or “Company”) understand in this current situation there may be disruptions in business leading to low cashflows or the earnings of individuals and self-employed professionals may have been impacted. Our aim through implementing this relief package is to ensure that you can continue to take care of your family, your business and your own self and tide over this temporary situation.
Do check below on details of the moratorium scheme and also guidance on how you can avail the moratorium.
1. What is the relief RBI provided under COVID - 19 regulatory package?
As a measure of solidarity, RBI has permitted all Indian Banks / Indian Financial Institutions to grant a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020. Eligible Borrowers opting this concession are not required to pay the Instalment during the period.
2. Who are eligible?
All customers of the Company across products who are impacted by COVID-19 pandemic / current lock-down and have challenges in servicing their instalments are eligible to seek deferment of all instalments falling due from March 1, 2020 to May 31, 2020.
The status of account has to be standard as on March 1, 2020 i.e. all the customers whose loan asset classification is Standard, SMA2, Stage 1 or Stage 2 as on March 1, 2020 shall be eligible to opt for the moratorium relief subject to terms & conditions as specified in this policy.
Please also refer FAQ number 19 for customers who are specifically excluded / not eligible for relief under moratorium scheme.
3. Which loans are covered under this moratorium scheme?
The scheme will be applicable to all types of loans provided by the Company viz. ESOP Financing, Loans against Securities, Margin Trade Funding and Unsecured Loans.
4. What is the nature of moratorium available?
Eligible customers may seek deferment of all instalments falling due from March 1, 2020 to May 31, 2020.
Instalments would include the following payments falling due from March 1, 2020 to May 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments. This will include instalments and interest related to revolving / overdraft facilities
5. What are the terms and manner of seeking relief?
Eligible customers must request for seeking deferment and submit their consent agreeing to the terms and conditions governing the moratorium and for the revised repayment schedule.
For obtaining the consent of the customers, suitable notice shall be published on the Company website or through either one or multiple modes such SMS to customers registered mobile number and/or Email communication will be sent on registered Email id (wherever available)
The offer of moratorium / deferment and acceptance may be through Email or any other mode of communication viz SMS/Digital Document/Voice Recording/Physical Document or any other mode acceptable to the Company.
6. When can customer send request seeking deferment or reliefs available?
The customer may opt for moratorium relief anytime during the moratorium period e.g. for all the three months or only for the month of April and May 2020 or only for May 2020. However, moratorium would be granted only in respect of those instalments for which payments have not been made by the customer.
Please note that instalments already paid would not be refunded.
7. What will happen if customer chooses the Instalment Moratorium?
a) Interest shall continue to accrue on the outstanding portion of the loans during the moratorium period and the said accrued interest shall be collected immediately after the moratorium period is over or as per revised repayment schedule.
b) The repayment schedule for such loans as also the residual tenor, will be shifted to the extent of moratorium availed, after the moratorium period.
8. Will the moratorium be applicable in case of new loans sanctioned after March 1, 2020?
New loans sanctioned and availed after 01 March 2020 will be eligible for instalment moratorium. Such customer may opt for moratorium relief anytime during the moratorium period e.g. for all the three months or only for the month of April and May 2020 or only for May 2020. However, moratorium would be granted only in respect of those instalments for which payments have not been made by the customer.
9. How can I opt for the moratorium?
Eligible Borrowers of Loan against Securities availing the moratorium through opt-in can write to LAS.Servicing@edelweissfin.com providing the following details; Name of the borrower, Loan account number, Nature of Loan / facility, Nature of deferment/moratorium- Interest/Principal or both, Months for which the moratorium is being requested and the Rationale for deferment (i.e. How the repayment capacity is impacted due to COVID 19)
All Borrowers should note that any moratorium request should be received by the Company at least two working days in advance before your next Instalment Due date.
10. Can a customer avail Instalment moratorium for more than one loan from Edelweiss?
Yes; Borrowers can opt for Instalment moratorium for as many loans that they have availed from us. However, requests have to be placed as per FAQ number 9 above.
11. Will I be communicated if my request for moratorium has been accepted?
Yes, once a customer approaches the Company with a request for moratorium / Instalment deferment, it will be evaluated and if satisfied with the merits of the case, moratorium / instalment deferment will be accepted and communicated to the customer, subject to customer agreeing to the terms and conditions for grant of moratorium / Instalment deferment.
12. Will bounce charges/ overdue charges be levied for Instalment’s of the moratorium period?
There will be no bounce charges, overdue interest applicable to customers, who have opted and have been granted Instalments moratorium, in respect of such Instalments for which moratorium has been granted.
13. Since the instalments are not to be paid, how will the loan be adjusted?
Moratorium of three months on payment of instalments falling due between March 1, 2020 and May 31, 2020 will be offered. During the said moratorium period, Interest shall continue to accrue on the outstanding portion of the loan. The Interest accrued during period of moratorium will be added to the outstanding loan amount at the end of the moratorium period and the repayment schedule for such loans will be recalculated Accordingly, the residual tenor, will be shifted further by up to the moratorium period.
14. Does this moratorium period affect my Credit rating?
If you are eligible and have availed of the moratorium, your credit bureau records will not be impacted due to non-payment of Instalment during the moratorium period.
This does not apply to any non-payment of Instalment for prior period upto March 1, 2020. However, that you availed the moratorium facility will get reported to Credit Bureaus.
15. What will happen to the accounts which are overdue on or before 1st March 2020?
Since the relief is extended for instalments of loan which are due only between 1st March 2020 to 31st May 2020, the existing instalments falling due up to 29th February 2020 will have to be paid as early as possible and penalty will be levied on any defaults of such overdue as per existing contractual obligations. No moratorium shall apply to the instalments fell due before February 29, 2020 and remained overdue.
16. What if my cash flow is not impacted on account of Covid-19 and hence I do not intend to avail moratorium and want to continue to make the EMI Payment as in past?
It is a relief granted to the borrower due to the temporary disruption caused by the sudden lockdown. However, if the borrower has not got impacted and is capable to make an Instalment payment as per existing terms of his loan, it is advised to continue making the payment.
17. If customer has opted for moratorium, can he still choose to make instalment payments?
18. Can Customers who have already paid instalments for month of March 2020, apply for moratorium
Yes, eligible customers who have already paid Instalment for the month of March 2020, would be granted deferment for the month of April and May 2020 only, subject fulfilment of conditions explained in this FAQs. Please note that instalments already paid would not be refunded.
19. Which type of customers are not eligible for seeking instalment moratorium ?
a) All such customers whose loans have been classified as NPA or became NPA or Stage 3 as on March 1, 2020 would not be eligible for moratorium / instalment deferment.
b) All such customers whose matters are pending with National Company Law Tribunal (NCLT) / Insolvency & Bankruptcy Code (IBC) would not be eligible for moratorium / instalment deferment.
20. For Borrowers of Loan against Securities, will the client have to provide top-up margins?
Yes. For Loan against Securities, Client will have to maintain the required margin in the form of securities acceptable to the lender. Failure to provide top-up will lead to liquidation of collateral as done in normal course of business to reduce the outstanding loan.