Instalment Moratorium (COVID CARE) – Retail Loans - Extension: Frequently Asked Questions
1. What is the instalment moratorium provided for loans under COVID 19 - regulatory package?
A. The prevailing situation may pose a huge challenge for people and put them under financial stress at large. As a measure of solidarity, the RBI has permitted all Indian Banks/ Indian Financial Institutions to offer the moratorium extension on their instalment payments falling due between 1stJune, 2020 to 31st August, 2020, to its customers.
2. What is the meaning of moratorium?
A. Moratorium means a deferment of payment. This means that during the period of moratorium no payment has to be made by the customer to the lending institution (PCHFL). The interest which is accrued for the moratorium period shall become payable after the end of the moratorium period. Thus this is like a deferment of payment.
3. Who is eligible to apply for the moratorium?
A. All PCHFL customers who have availed of retail mortgage loan & have economic fallout from COVID- 19 are eligible to apply for the moratorium. Customers having overdue prior to 1st June, 2020 may also opt for the moratorium, and their requests shall be considered by PCHFL based on its merits.
4. If I had already applied for the moratorium in earlier regulatory package till 31st May, 2020, will the moratorium be applicable by default from 1st June to 31st August, 2020?
A. All customers who had already availed the moratorium in the earlier package and wish to continue in the new package, i.e., from 1st June to 31st August, 2020, will have to reapply for the moratorium. In case PCHFL does not receive request for the moratorium within the period as specified by PCHFL on it’s website , instalments from 1st June, 2020 will be processed for banking as per instalment due date.
5. What will happen if I am granted the moratorium on my loan instalment?
A. If you are granted the moratorium on your loan instalment, PCHFL will not ask for any instalment payment for the months for which the moratorium has been granted. Interest will continue to accrue on the principal outstanding for the period of the moratorium at the contracted rate of the loan.
6. Will opting for the moratorium give relaxation of free instalment period?
A. The idea of the moratorium is not to give you an interest free period but instead it is to help with cash flow. However, we recommend customers to opt for the moratorium only in case of genuine financial stress only.
7. Does moratorium mean waiver of instalments?
A. This is not a waiver, but a deferment. Customer will have to pay the instalments at a later date as decided by the lending institution. The RBI has guided lending institutions to have board-approved policies in place on the instalment moratorium.
8. Does the moratorium cover both Principal and Interest?
A. Yes. It does. You can defer payment of your entire instalment, including principal and interest in case you opt for the moratorium.
9. Why was my bank account debited with instalment amount when the RBI has announced the moratorium?
A. Since you have not applied for the instalment moratorium within the period as specified by PCHFL, we have debited your bank account. Opting for the moratorium is entirely the customers’ choice. We understand that all our customers may not opt for the moratorium given that there is an additional levy of interest payable under the terms of the moratorium.
10. What charges will I pay, if I avail of this instalment moratorium?
A. You don’t have to pay any additional charges to avail this instalment moratorium. But if you avail the instalment moratorium, there will be a levy of interest at the contracted rate of the loan for the period of the instalment moratorium on the loan outstanding. Such interest will be collected by extending the original tenure of the loan accordingly.
11. Has the RBI granted a compulsory moratorium? Will PCHFL grant moratorium to all loan customers by default?
A. No, the lending institutions have been permitted to allow the moratorium extension up to three months. This is a relaxation offered by the RBI to the lending institutions. However, this is neither an RBI guidance to the lenders, nor is it a leeway granted by the RBI to the borrowers to delay or defer the repayment of the loans. Customers wanting to avail moratorium offer need to specifically request/ apply for the same justifying that they have economic fallout from COVID-19.
12. How to put request to get this instalment moratorium?
A. You can put the instalment moratorium request at least 2 days prior to the instalment due date by providing your loan account number on the following link:
- Submit your request in a few clicks here
Note: Keep your loan account number handy before you start the process.
13. I have more than one loan with PCHFL (Eg. Home loan, Topup, Home Equity, etc). Can I get instalment moratorium for all the loans?
A. If the customer applies for the moratorium, the same shall be applicable to all linked loans of the customer. Please note that additional interest for the instalment moratorium period will be applicable for each loan separately.
14. Please elaborate the aforementioned regulation and its impact on a customer’s loan account, with the help of an example?
A. You may refer to the below mentioned illustration to understand the impact of the instalment moratorium for two months.
Mr. Kumar availed of a housing loan in 1st May, 2020 amounting to Rs. 1,00,00,000 with loan tenure of 236 months. If Mr. Kumar wants to avail of moratorium of instalment of Rs. 90,521 which is due on 1st June, 2020 then the interest for the month of May amounting to Rs. 75,000 will be added to the principal amount and revised opening principal amount on 1st June, 2020 will become Rs. 10,075,000. The interest will be computed on revised principal. Similarly, the interest for the month of June 2020 which is payable on 1st July, 2020 of Rs. 75,562 will be added to the opening principal on 1st July, 2020 which will be Rs. 10,150,562. The interest will be computed on revised principal.
Wherever customers have opted for the instalment moratorium, interest shall continue to accrue on the outstanding principal of the loan during the moratorium period & the loan account will be re-scheduled by:
- a. Increasing the residual loan tenure (up to permissible limit) to collect the deferred instalments which will include the outstanding principal and interest accrued; or
- b. Increasing the instalment amount with or without any change in the loan tenure for the cases in which monthly interest amount exceeds monthly instalment amount or total tenure exceeds the permissible limit.
It is, therefore, advisable to restrict the selection of the moratorium option only in the scenario of cash flow issues.
15. Does the moratorium affect my Credit Rating?
A. No. Opting for the instalment moratorium will not affect your Credit Rating or Score.
16. Will there be delayed payment charges for the missing instalments during the moratorium period?
A. Delayed payment charges and overdue interest will be applicable in case of default in payment. However, during the moratorium, the payment itself is contractually stopped. If there is no payment due, there is no question of a default. Therefore, there will be no overdue interest or delayed payment charges to be levied.
17. Is PCHFL required to grant the moratorium to all categories of borrowers?
A. Once a customer approaches PCHFL with a request for the instalment moratorium, PCHFL as per its policy will evaluate such request and if satisfied with the merits of the case, the instalment moratorium will be considered at the sole discretion of PCHFL.
18. Can the borrower pay in between the moratorium period?
A. It is a relief granted to the borrower due to disruption caused by the sudden lockdown. However, the option lies with the borrower to either repay the loan during this moratorium as per the actual due dates or avail the benefit of the moratorium. In case customer wants to repay the principal during the moratorium period, it will be considered as part prepayment.
19. Do I need to submit fresh Auto Debit or NACH debit mandates?
A. There is no need of fresh NACH mandate. If you opt for the moratorium, the residual tenure will increase to recover the accrued interest during the moratorium period. In case the instalment amount increases, then too the current NACH registration which is done for up to 2 times the instalment amount will suffice.
20. Can I repay all months’ instalment after availing the moratorium/ after completion of the moratorium period?
A. As the tenure/ instalment amount of the retail term loans will be revised on account of the moratorium, the customer will be required to pay the instalments as per the revised schedule. However, in case your cash flows permit, part prepayment is permitted during the moratorium period/ after the moratorium period, in lines with the applicable terms and conditions of part prepayment agreed in the Most Important Terms and Conditions (MITC) document.
21. Can I get refund of instalment already paid during this period?
A. The moratorium will be made applicable on a particular loan after receiving request for the moratorium and due assessment of the same by PCHFL. If the moratorium request is received after the instalment due date, we shall be unable to accede to any requests for refund of instalments already received. Eg. Mr. Kumar’s instalment for June 2020 was cleared successfully and thereafter he submits the request for the moratorium on 20th June, 2020. In such a scenario, the moratorium can be granted for instalments falling due post 20th July, 2020 till 31st August, 2020. The already paid instalment of June, 2020 cannot be refunded.
Customers who do not apply for the moratorium will deem to have rejected/ not accepted the moratorium. In such a case, regular instalment will continue to be paid.
22. If I do not want the instalment moratorium, what should I do?
A. If you do not want the instalment moratorium, no further action is required from your side. We will continue to bank your repayment instructions.
We encourage customers with adequate funds to continue paying during this period to avoid the extra interest, charges and tenure extension.