RBI defers interest payment on working capital loans for 3 months
Friday - May 22, 2020 3:37 pm , Category : BUSINESS
Mumbai, May 22 (IANS) In a bid to ease the pressure of interest repayment on borrowers, the Reserve Bank of India has deferred the interest repayment on working capital facilities for three months and has allowed the repayment of accrued interests in tranches by March 31, 2021.Announcing a slew of liquidity easing measures on Friday, RBI Governor Shaktikanta Das on Friday said in respect of working capital facilities sanctioned in the form of cash credit or overdraft, lending institutions are being permitted to allow a deferment of another three months, from June 1, 2020 to August 31, 2020.In March, the central bank allowed a three month deferment till May 31 on payment of interest in respect of all working capital facilities outstanding as on March 1, 2020."In order to ameliorate the difficulties faced by borrowers in repaying the accumulated interest for the deferment period on working capital facilities in one shot, lending institutions are permitted to convert the accumulated interest on working capital facilities over the deferment period (up to August 31, 2020) into a funded interest term loan which shall be repayable not later than the end of the current financial year (March 31, 2021)," said the RBI statement.Further, in a big relief to the corporate sector the RBI on Friday allowed a three-month extension of moratorium on payment of instalment with respect to all term loans outstanding on March 1, 2020.The moratorium, as announced by RBI on March 27, was ending on May 31. This has been extended till August 31 now.