Banks may defer EMI payments for home loan borrowers after Aug 31

New Delhi | Jagran Business Desk: There might be some reprieve for retail home loan borrowers who have either lost their job or faced pay cuts due to the COVID crisis. Banks may further extend the period for EMI payments as part of its loan restructuring plan after August 31, when the RBI-granted moratorium ends.

Lender including SBI, are working on restructuring options for home loans where the overall tenure of the loan does not extend by more than two years, Times of India reported. If a borrower has suffered total loss of income, banks may allow EMI deferment for a few months.In some cases, step-up EMIs, with a lower payout will be granted to make up for a reduction in salary banks due to the Covid-19 outbreak.

The report says banks don't want to classify defaulters as non-performing assets as it is not the right time to enforce security and confiscate assets.

The report further says banks will draft their own proposal and make a submission to their boards after getting an exact idea over the number of borrowers who are facing financial stress.

Notably, banks had requested the RBI to allow one-time restructuring of loans as they don't want to classify defaulters as non-performing loans

Last week, RBI gave permission to lenders to go for a one-time restructuring of corporate and personal loans facing stress due to the disruptions caused by a coronavirus.

"The Reserve Bank of India''s decision allowing lenders to restructure loans would increase their refinancing requirements, especially for non-banking banking companies (NBFCs)," India Ratings and Research said in a report.