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Overview

Under RBI COVID19 package, our Bank had earlier offered the  valued customers the option of moratorium of up to 3 months on the payment of Loan EMIs and Credit Card dues, i.e., the choice to defer your Loan EMIs and/or Credit Card dues falling between March 1, 2020 and May 31, 2020.

As announced in the RBI Governors statement of May 22, 2020, the intensification of COVID-19 disruptions has imparted priority to relaxing repayment pressures and improving access to working capital by mitigating the burden of debt servicing, prevent the transmission of financial stress to the real economy, and ensure the continuity of viable businesses and households, and thus  banks have been permitted to extend further relief as follows:

a) RBI has permitted the banks to extend the moratorium by another three months i.e. from June 1, 2020 to August 31, 2020 on payment of all instalments in respect of term loans (including agricultural term loans, retail and crop loans). Accordingly, the repayment schedule for such loans as also 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.
b) In respect of working capital facilities sanctioned in the form of cash credit / overdraft (“CC/OD”), RBI permitted the banks to allow a deferment of another three months, from June 1, 2020 to August 31, 2020, on recovery of interest applied in respect of all such facilities.
c) RBI has also permitted banks, 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.
d) As a one-time measure, RBI has also permitted the banks to recalculate the ‘drawing power’ by reducing the margins until August 31, 2020. However, in all such cases where such a temporary enhancement in drawing power is considered the margins shall be restored to the original levels by March 31, 2021; and/or, review the working capital sanctioned limits up to March 31, 2021, based on a reassessment of the working capital cycle. The above measures shall be contingent on banks satisfying themselves that the same is necessitated on account of economic fallout from COVID-19.
e) Since the moratorium/deferment/recalculation of the ‘drawing power’/ reassessing the working capital cycle are being provided specifically to enable the borrowers to tide over economic fallout from COVID-19, the same will not be treated as concession or change in terms and conditions of loan agreements due to financial difficulty of the borrower. Hence, these reliefs will not result in downgrading of asset classification of the borrower.
f) This also will not qualify as a default for reporting to Credit Information Companies and also under supervisory reporting.
g) It is also provided, in line with the clarification provided by the Basel Committee on Banking Supervision, in respect of all accounts classified as standard as on February 29, 2020, even if overdue, the moratorium period, wherever granted, shall be excluded by the lending institutions from the number of days past-due for the purpose of asset classification under the IRAC norms.
The above measures shall be contingent on the lending institutions satisfying themselves that the same is necessitated on account of the economic fallout from COVID-19.

• IndusInd Bank’s policy for providing the said relief to borrowers:

This policy applies to all credit facilities granted and disbursed by the Bank and outstanding as on March 31, 2020, including Indian entities that have availed foreign currency borrowings from GIFT City and are impacted by Covid-19. This dispensation will not be available to foreign entities, incorporated outside India, who have availed loans from Gift City (including subsidiaries of Indian entities). The policy will be applicable to NBFCs, HFCs and Microfinance institutions subject to detailed assessment and justification for the same. The following facilities will not be eligible for relief:

• Swap/ derivative payables
• LC devolvement/ guarantee invocation
• Balance transfers from other lending institutions during the period
• Accounts which are NPA
• Any other facilities/ reliefs, not specifically approved for grant of moratorium by regulator.

Also Borrowers who are:

• Undergoing a recovery action admitted in the relevant judicial body
• Classified as NPA
• They / their directors/ partners/ trustees/ office bearers have been reported as wilful defaulter/ RFA/ Fraud by IBL  or any other bank or
• Have not complied with terms and conditions of earlier sanction will not be eligible for relief.

• A. Term loans and similar fixed term facilities including DLODs:

  The Bank will consider relief in the form of moratorium / deferment to borrowers, who wish to avail and make an application to the Bank seeking

  • Moratorium on term loan instalments of principal and interest, payables on other fixed term facilities and credit card dues falling due between June 1, 2020 and August 31, 2020 (additional Moratorium Period)
  • The repayment period for such facilities will shift by a further three months, with a corresponding increase in the tenor of the term loan/ fixed term facility
  • Conversion of the accumulated interest during the moratorium period/ additional moratorium period into a FITL repayable, not later than March 31,2021, ordinarily in 6 monthly instalments beginning October 31, 2020
• B. Working capital facilities:
  (a) Deferment of interest:
  • In the case of Overdraft / Cash Credit, and Agricultural Crop Loans the Bank will consider deferment of interest applied to borrowers on the merits of the case affected by COVID 19, during the Additional Moratorium Period.
  • The deferred interest in normal course need to be paid immediately after the moratorium period i.e., September 1, 2020. However, customers who are desirous of converting the accrued interest into a Funded Interest Term Loan (FITL) including for earlier relief period (March 1 to May 31, 2020) should make a specific request to the Bank. Such requests will be examined by the Bank on a case-to-case basis and accrued interest would be converted into FITL at the discretion of the Bank depending on the merits of the case affected by COVID 19. Wherever allowed such FITL needs to be re-paid, as per the terms and conditions prescribed by the bank. However, the outer limit to repay the FITL would be March 31, 2021.

  (b) Reduction of margin:

  • For customers facing stress due to the economic fallout of the pandemic, the Bank will consider reduction of margin on stocks/receivables/other eligible securities, etc., for the purpose of computation of Drawing Power (DP) for OD/CC limits and allow higher DP than earlier, based on impact on the borrower, basis credit assessment.
  • Such concession in reduction of margin would be valid in respect of all changes effected up to August 31, 2020 for such period not exceeding March 31, 2021 as per the impact assessment on working capital cycle. After such period, the margin would be reverted to pre-relief margin stipulated by the Bank.

  (c) Reassessment of working capital cycle / limits

  • For customers facing stress on account of the economic fallout of the pandemic, the Bank may re-assess the working capital cycle for period up to March 31, 2021 factoring the COVID19 impact on customer’s business
  • In case the working capital arrangement is under a Consortium, the reassessment of limits will need to be harmonized with the assessment of the Lead Bank of the Consortium.
  • Once the original limit is reinstated, any further concession would have to be dealt with as per the usual restructuring norms stipulated by RBI.

  The above dispensation should be adequately justified by the Borrowers, with documentary evidence for:

  • cancellation / deferment / re-schedulement of orders
  • shutdown of unit / work place,
  • non-availability of manpower/ transportation to complete the manufacturing / sale of goods / services,
  • non-realization of debtors or elongation of realization period
  • For retail personal consumption loans and cards Bank would offer Moratorium based on clients request  and / or based on the repayment status.

  Moratorium for Retail loans and Credit Cards (Personal Loans / Business Loans / Health Care / Loan Against Property and Credit Cards) :

• Term Loans
  • Moratorium of three months on payment of all instalments falling due between June 1, 2020 and August 31, 2020 will be offered.  The Interest accrued during the moratorium period will be added to the outstanding loan amount and the loan will be extended for a revised tenor, keeping the EMI as the same.
  • Moratorium will only be a deferment of instalment to be repaid and not a concession or waiver of the EMI due.
  • If a customer has provided an instruction to debit his account via NACH/SI, Bank will present them to pay the EMI’s during the moratorium period, as per the due date.
  • Customers wanting to avail the moratorium, need to make an application (ref Product specific FAQ’s) for the process of availing moratorium
  • Bank upon receipt of request will stop Banking of EMI’s during the moratorium period. However, the interest will continue to accrue on the loan outstanding amount.
  • Clients who do not clear their EMI will be deemed to have availed moratorium to ensure their bureau records are not impacted
  • No Cheque bounce / Late payment charges will be levied during the moratorium period.
  • Customers who have availed the moratorium and want to pay EMI payments can do the same through the Banks digital payment link’s (ref product specific FAQ’s for correct payment links)

 

• Credit Card
  • Bank will continue to send the normal monthly statement to all the clients and will communicate the total and minimum
  • Eligible Customers (Standard Accounts as of 1st March 2020 and Card Accounts opened before 1st March 2020) who do not wish to avail the moratorium relief can make the payments on or before the due date.
  • Eligible clients who do not pay at least the minimum payment due by the due date’s during this period  will be deemed to be on moratorium,
  • No Late Payment Charge will be levied to such account and client’s bureau records will not be impacted.
  • Interest however will continue to get billed in case of non-payment by due dates or in case where payments made are less than total statement dues.

 

• Other matters:

  The Bank will examine such requests on the merits of each case, depending on the nature of activity, impact of the lockdown conditions, geographical and regional factors, actual and estimated cash flows and activity levels etc.  Interest would continue to accrue during the moratorium period on the outstanding amount payable by the customers as prescribed in this policy.

  This benefit will be given, after assessment that the same is necessitated on account of the economic fallout from COVID-19. For retail customers, Bank will send a SMS / email communication to all eligible clients to revert back if they want the Bank to retain or extend  the present  EMIs.  For Corporate and Commercial Banking customers  are requested to send a communication my E-mail/ SMS from an ID/ phone registered with the Bank to the Branch/ Relationship Manager .

  IBL may stipulate additional conditions in the loan arrangement for providing the above relief and will require the Borrowers/ Guarantors/ SBLC providers to execute appropriate documentation, at their cost

  Borrower customers are advised to carefully evaluate their cash flows and need for relief, before applying / opting in for the relief package. Borrowers may be required to provide cash flow statements (actuals and forecast) in support of their application

  • The moratorium/ deferment granted to borrowers will not qualify as default on the part of borrowers for the purposes of supervisory reporting and reporting to credit information companies (CICs).
  • The relief given as above as per the special dispensation given by RBI will not result in any downgrade of asset classification.
  • In case any Borrower opts in for relief on or before June 6, 2020 the Bank will exercise forbearance in raising a demand for dues payable and also reporting default to CICs/ CRILC

  The Bank may alter his policy at any time, subject to regulatory direction.

ECLGS INFORMATION PL/BL/HCF FAQs LACR FAQs FLIP FAQs Credit Cards FAQs LAP FAQs LAS FAQs

Vehicle Loan & Affordable Housing FAQs