RBI vide their circular no. DOR.No.BP.BC.47 / 21.04.048 / 2019-20 dated March 27, 2020 and circular no. DOR.No.BP.BC.71/21.04.048/2019-20 dated May 23, 2020, introduced certain regulatory measures to mitigate the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure the continuity of viable businesses.
We at Edelweiss Retail Finance Limited (hereinafter referred to as “Edelweiss” or “Company”) understand the current situation and disruptions caused by the same. Our Board has approved a scheme in lines with aforesaid RBI circular to all our customers across all loan products.
Please refer below Frequently Asked Questions (FAQs) in respect of the Moratorium for further details of the guidelines.
1. What is the relief RBI provided under COVID-19 regulatory package?
RBI has permitted the Company to grant a moratorium of six months on payment of all instalments falling due between March 1, 2020 and August 31, 2020. Eligible Borrowers opting this concession are not required to pay the Instalment during the aforesaid period. . It is clarified that the moratorium would be granted only in respect of those instalments for which payments have not been made by the customer and shall be eligible to opt for deferment only for the instalments falling due for the remaining months till August 31,2020.
2. Who are eligible?
All customers of the Company across products who are impacted by COVID-19 pandemic / current lock-down and have challenges in servicing their instalments are eligible to seek deferment of all instalments falling due from March 1, 2020 to August 31, 2020.
The status of account has to be standard as on March 1, 2020 i.e. all the customers whose loan asset classification is Standard, SMA2, Stage 1 or Stage 2 as on March 1, 2020 shall be eligible to opt for the moratorium relief subject to terms & conditions as specified in this policy.
Please also refer FAQ number 21 for customers who are specifically excluded / not eligible for relief under moratorium scheme.
3. Which loans are covered under this moratorium scheme?
The scheme will be applicable to all types of term loans provided by the Company viz. Loan against Property, Personal loan, Salary Advance Loans, Business Loans, SME Secured Loans, Equipment Loans, Working Capital Term Loans, Loans against Securities, Corporate Loans, etc.
4. What is the nature of moratorium available?
Eligible customers may seek deferment of all instalments falling due from March 1, 2020 to August 31, 2020. Instalments would include the following payments falling due from March 1, 2020 to August 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments.
5. What are the terms and manner of seeking relief?
Eligible customers must request for seeking deferment and submit their consent agreeing to the terms and conditions governing the moratorium and for the revised repayment schedule.
For obtaining the consent of the customers, suitable notice shall be issued through either one or multiple modes such as published on the Company website and / or through SMS to customers registered mobile number and/or Email communication will be sent on registered Email id (wherever available).
6. When can customer send request seeking deferment or reliefs available?
The customer may opt for moratorium relief anytime during the moratorium period e.g. for all the six months from March 1, 2020 to August 31, 2020 or part thereof. However, moratorium would be granted only in respect of those instalments for which payments have not been made by the customer.
Please note that instalments already paid would not be refunded.
Notwithstanding above, in respect of EMI loans, any unpaid EMIs for the month of March 1,2020 upto August 31,2020 will be considered and ‘opted in’ for moratorium in respect of such unpaid EMIs or as advised by customers. The customer will have an option to ‘opt out’ of such moratorium, and specific request through any mode of communication i.e. letter/ email should be submitted to the Company.
7. What will happen if customer chooses the Instalment Moratorium?
a) Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period. In case of non-EMI loans, the said accrued interest shall be collected immediately after the moratorium period is over or as per revised repayment schedule in which case, the accrued interest will be capitalized and its repayments shall be equally spread over the remaining principal repayment schedule. In case of EMI Loans, the said accrued interest shall be collected as per revised repayment schedule.
b) The repayment schedule for such loans as also the residual tenor, will be shifted to the extent of moratorium availed, after the moratorium period.
8. Will the moratorium be applicable in case of new loans sanctioned after March 1, 2020?
New loans sanctioned and availed after March 1, 2020 will be eligible for instalment moratorium. Such customer may opt for moratorium relief anytime during the moratorium period e.g. for all the six months or part thereof. However, moratorium would be granted only in respect of those instalments for which payments have not been made by the customer.
9. How can I opt for the moratorium?
Eligible Borrowers of: Loan against Property, Personal Loans, Salary Advance Loans, SME Secured Loans, Business Loans, Equipment Loans -click here CLIENT LOGIN .The Company shall also be sending suitable communication to the registered Email id and mobile numbers of the eligible borrowers for availing the moratorium through opt-in.
Eligible Borrowers of Loan against Securities can write to LAS.Servicing@edelweissfin.com providing the following details; Name of the borrower, Loan account number, Nature of Loan / facility, Nature of deferment/moratorium- Interest/Principal or both, Months for which the moratorium is being requested and the Rationale for deferment (i.e. How the repayment capacity is impacted due to COVID 19).
Eligible Borrowers of all Other Loans- kindly contact your Relationship Manager for making a moratorium request.
All Borrowers should note that any moratorium request should be received by the Company at least two working days in advance before your next Instalment / EMI Due date.
10. I had already opted in for moratorium for the period of Mar-May 2020, and wish to extend for Jun-Aug 20; Do I need to Opt-in again for moratorium for the period of Jun-Aug 2020?
Yes, Opt-in requests for Jun-Aug 20 would be required afresh, should you wish to opt for a moratorium during this period. The decision to offer a moratorium to a customer will be at the sole discretion of the Company.
Please refer FAQ number 9 to opt for the moratorium.
11. I had opted in for a moratorium during March – May 2020, but do not wish to enrol for June – August 2020, what do I need to do?
No further action is required from the Borrower.
However For EMI loans, who have been opted in for moratorium in respect of their unpaid EMIs or as advised by the respective customers as stated in FAQ No. 6 above, would have option to opt out any or all of the months for which moratorium has been granted provided such request have been received latest by September 30, 2020.
12. Can a customer avail Instalment / EMI moratorium for more than one loan from Edelweiss?
Yes; Borrowers can opt for Instalment / EMI moratorium for as many loans that they have availed from us. However, requests have to be placed as per FAQ number 9 above.
13. Will I be communicated if my request for moratorium has been accepted?
Yes, once a customer approaches the Company with a request for moratorium / Instalment deferment, it will be evaluated and if satisfied with the merits of the case, moratorium / instalment deferment will be accepted and communicated to the customer, subject to customer agreeing to the terms and conditions for grant of moratorium / Instalment deferment.
14. Will bounce charges/ overdue charges be levied for Instalment / EMI’s of the moratorium period?
There will be no bounce charges, overdue interest applicable for customers, who have opted and have been granted Instalments moratorium, in respect of such Instalments for which moratorium has been granted.
15. Since the instalments are not to be paid, how will the loan be adjusted?
Moratorium of six months on payment of instalments falling due between March 1, 2020 and August 31, 2020 will be offered. During the said moratorium period, Interest shall continue to accrue on the outstanding portion of the term loan. The Interest accrued during period of moratorium will be added to the outstanding loan amount at the end of the moratorium period and the repayment schedule for such loans will be recalculated Accordingly, the residual tenor, will be shifted further by up to the moratorium period.
16. Does this moratorium period affect my Credit rating?
If you are eligible and have availed of the moratorium, your credit bureau records will not be impacted due to non-payment of Instalment during the moratorium period.
This does not apply to any non-payment of Instalment for prior period upto March 1, 2020. However, that you availed the moratorium facility will get reported to Credit Bureaus.
17. What will happen to the accounts which are overdue on or before 1st March 2020?
Since the relief is extended for instalments of loan which are due only between March 1, 2020 to August 31, 2020, the existing instalments falling due up to February 29, 2020 will have to be paid as early as possible and penalty will be levied on any defaults of such overdue as per existing contractual obligations. No moratorium shall apply to the instalments fell due before February 29, 2020 and remained overdue.
18. What if my cash flow is not impacted on account of Covid-19 and hence I do not intend to avail moratorium and want to continue to make the Instalment / EMI Payment as in past?
You can opt not to apply for the scheme and continue to pay instalments as per contractual terms. It is a relief granted to the borrower due to the temporary disruption caused by the sudden lockdown. However, if the borrower not got impacted and capable to make an Instalment payment as per existing terms of his loan, it is advised to continue making the payment.
19. If customer has opted for moratorium, can he still choose to make instalment payments?
Yes.
20. Can Customers who have already paid instalments for month of March 2020, apply for moratorium?
Yes, eligible customers who have already paid Instalment for the month of March 2020, would be granted deferment for the month of April -August 2020 only, subject fulfilment of conditions explained in this FAQs. Please note that instalments already paid would not be refunded.
21. Which type of customers are not eligible for seeking instalment moratorium?
a) All such customers whose loans have been classified as NPA or became NPA or Stage 3 as on March 1, 2020 would not be eligible for moratorium / instalment deferment.
b) All such customers whose matters are pending with National Company Law Tribunal (NCLT) / Insolvency & Bankruptcy Code (IBC) would not be eligible for moratorium / instalment deferment.
22. What about customers who have availed Micro Finance loans?
Moratorium/deferment benefit will be given to customers who have availed micro finance loans as per the policy adopted by the respective Micro Finance Partners. The Micro Finance partners would inform all identified customers about the moratorium/deferment schemes.
23. For Borrowers of Loan against Securities, will the client have to provide top-up margins?
Yes. For Loan against Securities, Client will have to maintain the required margin in the form of securities acceptable to the lender. Failure to provide top-up will lead to liquidation of collateral as done in normal course of business to reduce the outstanding loan.