RBI Repo Rate Cut by 75 Basis Points, EMI put on Hold – MPC Meet 27 March 2020
Reserve Bank of India Governor Shaktikanta Das announced that RBI repo rate has been cut by 75 basis points.
Reserve Bank of India Governor Shaktikanta Das today announced a cut in the repo rate by 75 basis points and that in reverse repo rate by 90 basis points to help the economy tide over the coronavirus distress.
Highlights of RBI Updates 27 Mar 2020
- Repo Rate reduced by 75 basis points to 4.40%
- Rev repo reduced by 90 basis points to 4.00%
- No EMI’s for 3 Months. No Cibil score impact.
- Auctions of long term repo operation (LTRO) of three-year tenure upto Rs1 lakh crore at floating rate linked to policy rate.
- All Commercial Banks, NBFC Permitted to Allow 3-Month Moratorium
- All Floating Rates loans emi’s will be going to fall. BIG THUMB for Borrowers. Example Home loan rates go as low as 7.15% as current 7.90% offered by SBI home loan.
Example for Home Loan EMI:
| Loan Amount | Current EMI @ 7.90% | EMI @ 7.15% after CUT | Saving’s per EMI |
| 1 Lakh for 30 Years | Rs. 727 | Rs. 675 | Rs.52 |
| 10 Lakh for 10 Years | Rs. 12,080 | Rs. 11,688 | Rs.392 |
| 20 Lakh for 20 Years | Rs. 16,481 | Rs. 15,687 | Rs.794 |
Here’s the Question & Answers on 3-Month Moratorium on Term Loans
The Reserve Bank of India on Friday took a series of measures to minimise the economic impact due to the lockdown caused by COVID-19, which includes moratorium on term loans.
Terms loans will include retail loans like home and auto loans but credit card dues are not included.
As a result, equated monthly instalment of borrowers are deferred by three months.
State Bank of India is the first bank which cancelled all the EMI for 3 months as per latest news.
Q: Will non-payment of loan emi’s result in impact on credit score?
A: No. It will not impact your credit card, a strict point mentioned by RBI.
Q. Which are the banks can offer 3 month No EMI benefit to their customers?
A: RBI orders all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) can extend the moratorium.
Confirmed Banks List: SBI (State Bank of India)
Q: Does this mean that I will have to pay all 3 EMIs at one go in July?
A: Unlikely, as the RBI’s statement suggests the tenor may be shifted. That is: the loan may end 3 months later than was originally slated. However, full clarity will be obtained once the RBI issues guidelines on this.
Q. What kind of Term loans does the moratorium cover?
A: The RBI policy statement explicitly mentions term loans, which includes home loans, personal loans, education loans, auto and any loans which have a fixed tenure. The also include consumer durable loans, such as EMIs on mobiles, fridge, TV etc
Q: Does the moratorium cover credit card payments or Loans on Credit Card?
A: Since credit cards are defined as revolving credit and not term loans, they are not covered under the moratorium. For second option like, loans on credit cards you have to check with your bank on this.
