The Reserve Bank of India vide its Notification dated 23rd May 2020 has extended the EMI moratorium period by another 3 months i.e. from June 1, 2020, to August 31, 2020, on payment of all installments in respect of term loans (including agricultural term loans, retail and crop loans). Accordingly, the repayment schedule for such loans as the residual tenor will be shifted across the board. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.
Further the working capital facilities sanctioned in the form of cash credit/overdraft, lending institutions are permitted to allow a deferment of another three months, from June 1, 2020, to August 31, 2020, on the recovery of interest applied in respect of all such facilities. Lending institutions are permitted, at their discretion, to convert the accumulated interest for the deferment period up to August 31, 2020, into a funded interest term loan (FITL) which shall be repayable not later than March 31, 2021.
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