INSUBCONTINENT EXCLUSIVE:
include unsecured loans such as credit card repayments and personal loans
outstanding inclusive of interest
with borrowers of loans with higher interests, such as credit cards and other unsecured personal loans
Rates in these cases are typically north of 40% per annum.
Industry experts have pointed out that the central bank relaxation guidelines
only cover deferment of principal amounts and lenders may still opt to accrue compounded interest rates in this period, leaving customers
under huge repayment burden when the moratorium ends.
Take for example a letter by credit card bill management fintech CRED to its
credit card as on March 3, would be required to pay Rs 1,15,000 in June, CRED explained
That would include the Rs 1,00,000 due as principal, and RS 15,000 by way of interest and other charges.
The central bank governor on Friday
announced a slew of measures, including a 75bps repo rate cut and grace period on all term loan repayments for a period of three months
between March 1 and May 31
These are taken to ease the economic impact on millions of borrowers facing financial disruption caused by the pandemic
In the absence of clarity from the central bank, the call on how and when the interest rates would accrue for customers opting for the
moratorium could depend on individual lenders.