RBI Announcement Update dt. 22/05/2020 for Moratorium of Loan and other relief

RBI Governor Shaktikanta Das

1. Term loan moratorium extended till August 31, 2020 - The loan moratorium will be extended till August 31, 2020. This makes it a six months moratorium.

2. Deferement of Interest on Working Capital - Interest on working capital is deferred by another 3 months i.e. till 31st August, 2020. 

3. Conversion of Interest on working capital to interest term loan - Lending institutions are being 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 (Repayable before 31st March, 2021). 

4. Margin for Working Capital - Drawing Power - Lending institutions are being permitted to restore the margins for working capital to the original level by 31st March, 2021. 

5. Reduce repo rate by 40 bps to 4 percent. Accordingly, Interest rate would be reduced.

6. Export Credits - Maximum permissible export credit (Pre and Post Shipments) extended from 12 months to 15 months.

7. Payment against Imports - Extension of time limit for making payments against imports from 6 months to 12 months

8. Support to EXIM Bank - Facility of Rs 15,000 crore line of credit for 90 days for US dollar swap facility will be provided to EXIM Bank.

9. Extension of Resolution Timelines - Deferement or moratorium period shall excluded while calculating 180 days resolution period.

10. Group Financing - Group exposure extended from 25% to 30%

10. Support to SIDBI- In order to provide greater flexibility of SIDBI, another 90 days extension for the 90-day term loan facilities will be offered. 

11. Assets Classification - Loan Moratorium shall not have any implications on changes in assets classification, credit history and ageing norms etc.

12. Trade Impact - Volume of world trade can shrink by 13%-32% this year.