Borrowers to get additional 90 days to repay home loans

[] To provide some relief to home loan borrowers who have been hit by the demonetisation drive, the RBI has decided to provide 30 days, in addition to the 60 days provided earlier, for repayment of loans between November 1, and December 31, 2016

In further relief to people hit by demonetisation, the Reserve Bank of India (RBI), on December 28, 2016, gave borrowers another 30 days, over and above 60 days, for repayment of housing, car, farm and other loans worth up to Rs 1 crore.

You are reading: Borrowers to get additional 90 days to repay home loans

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“On a review, it has been decided to provide 30 days, in addition to the 60 days provided (on November 21),” the RBI said in a notification. So, borrowers together get 90 days’ breather, from getting the account classified under the non-performing asset (NPA) category. The above dispensation will apply to dues payable between November 1, and December 31, 2016, it said.

[] Borrowers get additional 60 days to repay loans: RBI

The apex bank further said that all regulated entities, are permitted to defer the downgrade of an account that was standard, as on November 1, 2016, but would have become a NPA for any reason between November and December, by 90 days from the date of such downgrade. The additional time of 90 days will only apply to defer the classification of an existing standard asset as sub-standard and not for delaying the migration of an account across sub-categories of NPA.

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Dues payable after January 1, 2017, will be covered by the instructions for the respective entities. Last month, the RBI had provided additional 60 days for repayment of loans worth up to Rs 1 crore. The move came, after the surprise announcement by prime minister Narendra Modi on November 8, 2016, to scrap Rs 500 and Rs 1,000 notes, resulting in a cash crunch in the market and leading to slowdown in the businesses.

As a result, the repayment capacity of the borrowers were impacted and there was fear of loan defaults rising. The demonetisation of higher value currency notes, also affected normal banking activities, including clearing of cheques. Moreover, borrowers were unable to get payments from their creditors due to various restrictions, including the cash withdrawal limit of Rs 24,000 per week, limiting their options to repay their dues.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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