COVID - 19 RELIEF PACKAGE - CONTENT

COVID - 19 RELIEF PACKAGE

 

FAQs - COVID 19 RELIEF PACKAGE  PRADHAN MANTRI GARIB KALYAN PACKAGE

The Reserve Bank of India has announced a regulatory package on 27th March 2020, permitting Bank’s to allow a one-time rescheduling of payments in term loans and deferment of interest in working Capital facilities, to mitigate the burden of debt servicing on account of the fall-out of COVID-19 pandemic and to ensure the continuity of viable businesses.

Federal Bank is pleased to extend the benefits of moratorium to our customers in line with the RBI guidelines. The details are given below.

Term Loans

  • Term Loans coming under Business Loans, Retail Loans & Agricultural Loans outstanding as on 01st March 2020 with repayments either in instalments / bullet are eligible (The processes for each segment of customers is provided separately)
  • Moratorium shall be extended to term loans in standard status as at the end of 29th February 2020.
  • Moratorium shall be applicable for the instalments and interest payments falling due between 01st March 2020 and 31st May 2020.
  • Interest shall continue to accrue on the outstanding balance of term loans during the moratorium period at the contracted rate.
  • If a customer opts for moratorium, repayment schedule for the account shall be shifted / tenor will be increased.  
  • The revised instalment/ EMI to be remitted by the customer after moratorium shall be inclusive of the interest accrued during the moratorium period.
  • If any customer, whose account was standard as at the end of 29th February 2020, requests for reversal of instalment / EMI deducted, if any, after 1st March 2020, the same will  be refunded within a reasonable time.
  • Instalments, for the purpose of moratorium will include the following payments falling due from 01st March 2020 to 31st May 2020:
    • Principal and/or interest components;

    • Bullet repayments;

    • Equated Monthly instalments; 

  • Asset classification of term loans which are granted relief as above shall be determined on the basis of revised due dates and the revised payment schedule.

  • Customer shall remit arrears, if any, in the account as at the end of 29th February 2020 to avoid deterioration in credit score, reporting to Credit Information Companies (CICs).

Working Capital Facilities

  • The working capital facilities outstanding as on 01st March 2020 and which are in standard status on the said date are eligible.

  • Payment of   interest applied in the accounts during the period between 1st March 2020 and 31st May 2020 will be deferred. 

  • Interest shall continue to accrue on the outstanding portion of working capital facilities at the contracted rates.

  • The accumulated interest shall become due on 01st June 2020 and shall be repaid immediately. 

  • Customer shall remit exceeding/ amount in excess of sanctioned limit, if any, in the account as at the end of 29th February 2020 to avoid deterioration in credit score.

Easing of Working Capital Finance

The Regulatory package provides for ease of working capital facility by recalculation of drawing power by way of reducing margins and / or by reassessing the working capital cycle.  This shall be extended to those borrowers who are facing stress on account of the economic fallout of COVID – 19 pandemic. Bank will take decision on extending the easing of working capital facilities after assessing impacts in each case.

Process for implementation of moratorium for various customer segments is noted below:

Business Loans up to Rs. 5 Cr, Agricultural, Micro lending and Gold loans

Relief under moratorium and deferment of interest in working capital limits are extended to all loans in the above category.

Bank is reaching out to customers through SMS. If the customer wishes to opt out from the relief and continue with their existing payment schedule, shall respond to the said SMS.

Please be advised that emails sent earlier are being processed, and the Bank will respond shortly. Eligible customers will be granted the moratorium.

Business Loans above Rs.5 Cr

Collection of installment/ EMI will continue as per the existing terms. Customers who want to avail the moratorium shall reach out to the Relationship Manager of the Bank assigned for their account.Eligible customers will be granted the moratorium.

Retail Loans (Housing Loans, Car Loans, Loan Against Property, Educational Loan, Personal Loan)

Collection of instalment/ EMI will continue as per the existing terms. Customers who want to avail the moratorium shall contact respective branch.

On April 17, 2020, the Reserve Bank of India announced additional regulatory relief measures on Asset Classification. Accordingly, the benefit of asset classification will be automatically extended to customers who opted for moratorium in their Term loan and working capital facilities as mentioned above. Their asset classification status as on February 29, 2020 will be retained till May 31, 2020.

Extension of Covid 19 Relief package for three months (1st June 2020 – 31st August 2020)

The Reserve Bank of India on 22nd May 2020, announced extension of moratorium for payment of interest and instalment in term loans and deferment of payment of interest in working capital limits by further three months, till 31st August, 2020.  In tune with the same, the Bank has decided to extend the benefits by another three months for all the borrowers, who availed moratorium or deferment of interest. Customers who have not availed moratorium or deferment of interest earlier may opt for the same now. The customers can contact respective branch or Relationship Manager. The benefit of asset classification standstill will be automatically extended to those customers who opt for moratorium or deferment of interest.   

RBI has permitted conversion of interest accumulated during the period from 01st  March 2020 to 31st August 2020, in the deferment opted  working capital facilities into a Funded Interest Term Loan (FITL), which shall be repayable not later than the end of the current financial year i.e. 31st March 2021. The conversion will take place on completion of moratorium period and will be extended to those customers who opt for the same.