IBA to seek RBI clarification on moratorium implementation

IBA to seek RBI clarification on moratorium implementationA meeting between its representatives on how best to enforce the notification was held by the Indian Banks’ Association (IBA) on Monday. The association is now preparing to write to the regulator requesting guidance about how the moratorium should be implemented. The Reserve Bank of India ( RBI) has allowed banks to give a three-month moratorium on repayments to their borrowers. The meeting also took stock of the preparedness of banks to provide services in the midst of the lockdown, especially to the recipients of recent government announcements on income support.

The Chairman of the State Bank of India ( SBI) clarified that bank profitability is not affected by a moratorium. Interest accrual does not end and the payable date is altered, “he said after the RBI revealed its monetary policy on a conversation call with reporters.”

Banks are planning to ask the RBI if, in the case of borrowers who want to take advantage of or continue to apply the moratorium, they should forgo this additional interest and simply delay the repayment date. The response of the regulator may be important in terms of the actual compensation that the moratorium recipients would have to make.

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