IMPACT OF MORATORIUM ON BANKING NBFC , HFC LOAN BORROWERS

The EMI moratorium imposed by RBI lays an impact on the HFC, NBFC , Banking Industry both in a way of benefits the three months moratorium offered by RBI to all loan borrowers in this pandemic situation which perhaps would have come or as blessings to some , who had a hard impact on their regular income cash flow but nevertheless , it also has come with a price to pay.
On March 27, the RBI through an official notification announced the contours of the COVID-19 regulatory package. The EMI moratorium was one of the relief packages. Normally, if we don’t pay EMI on time, there are a whole host of penalties, and, plus, we become a defaulter. Hence, a time period of three months is more than generous and allows us to arrange our finances without becoming a defaulter. Also, the non-payment of EMIs causes bad effects on credit rating. Moreover, the EMI moratorium is not free. It has costs attached to it. The RBI has allowed lenders to change interest during the moratorium period, there will be interest effects. The end result is that after the three month moratorium period, either your EMI will go up or your existing loan tenure will get longer. This is the bad part.
HBFC is the leading housing finance company with a massive market share. Moratorium is an option being provided by HBFC to its customers whose accounts are standard as of February 29, 2020, and who are facing financial difficulty due to low cash flows or pay cuts caused by the corona-virus outbreak.
Bajaj Finance is one of the biggest NBFC s in India, it is an arm of Bajaj Finserv. Bajaj Finance Ltd. Offering a moratorium to its customers with a consistent loan repayment track record. To become eligible for the moratorium, customers should have no more than 2-EMIs overdue in any of their loans as of February 29, 2020. Customers have to write an email requesting a moratorium.

Name- ANKITA MITRA
1st semester, 2020