People queue up outside a State Bank of India branch in Ghatkopar. Pic/Datta Kumbhar
The Shiv Sena's Shiv Vahatuk Sena (SVS) and a senior Mumbai Congress leader have demanded relief for the people who have taken loans from banks and financial institutes, in view of a six-month moratorium on fixed-term loans and EMI payments, that will end on August 31.
SVS general secretary Mohan Goyal has urged Chief Minister Uddhav Thackeray to convince the Centre to review the Reserve Bank's credit policy, which does not provide for another moratorium. He wrote to the CM last week asking for yet another four-month moratorium till December end.
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City Congress vice-president Dr Amarjit Singh Manhas shot off a letter last week to the Reserve Bank of India (RBI) governor seeking extended moratorium and waiver on the interest accrued. Recently, the RBI allowed lenders to help borrowers by restructuring stressed loans after the loan moratorium expires on August 31.
Transporters hit badly
Goyal said the financial sector has been hit badly in the pandemic and the transport sector too is in a very bad shape. "There has been no business (except for essential services) in the past six months.
A lot of businesses are on the verge of closing because there is no income. In this situation, the transporters too are unable to pay their loan instalments. We want the CM to recommend to the Centre that the moratorium is extended till December 2020. This will help the transport sector to survive the bad phase," said Goyal.
Need interest waiver
Dr Manhas wrote to the RBI governor that the banking regulator did not make the moratorium mandatory but gave banks the option. "The banks are not obligated to fulfill the RBI's suggestion and can choose to ignore it based on financial health. Since the banking regulator made it optional for the banks to implement the orders of RBI, the banks may or may not give any relief to the people who are affected due to the lockdown," he said.
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Demanding a waiver on accrued interest, Manhas said the moratorium is a not a waiver because interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.
He said people are not made aware of the process, terms, and conditions of the payments after moratorium. "Eventually the people will be at a loss as they will have to bear the extra burden of paying the EMI along with the interest and late charge fee," he said.
Mumbai's own problems
Manhas said in Mumbai, the financial capital of the country, most people have taken some kind of loan or the other and they use their credit cards to cope up with their monthly expenses and pay EMI for the same even while paying other EMIs. "It is very important to provide relief to these people also," he said.
The Congress leader has suggested that there should be no penalty for non-maintenance of the minimum balance or withdrawals from any ATM till December 31, 2020, in all types of accounts, especially for saving accounts as people are already facing a financial crisis.
He wants banks to stop deducting the EMI from the bank accounts directly even if the customers have opted for a direct debit facility.
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