In a much needed respite to borrowers hit by coronavirus crisis, State Bank of India, the country's largest lender, has extended the moratorium on term loan EMIs by another three months, in line with Reserve Bank of India's (RBI) recent announcement.
"SBI has decided to extend the moratorium by another 3 months in loan accounts of all eligible customers without waiting for their request," the public sector lender said in a press release on Wednesday.
On May 22, the RBI Governor Shaktikanta Das had announced extension of the moratorium on payment of loans by another three months untill August 31, on account of an extended lockdown. Earlier in March, the RBI had provided a moratorium on all term loans for three months till May 31, 2020.
Adding to it, the lender has also simplified the process through which its customers can opt to defer the EMIs. It has started a SMS communication to nearly 85 lakh eligible borrowers asking about their consent to stop EMIs. "The borrowers have to reply with a YES to a designated virtual mobile number (VMN) mentioned in the SMS sent by the Bank within 5 days of receiving the SMS, if they wish to defer the EMIs," SBI said.
The bank has also reached out to all of its eligible loan customers to obtain their consent to stop their Standing Instructions (SIs) / NACH mandate for the EMIs falling due in June, July and August 2020, it said.
Earlier this month, SBI had slashed its Marginal Cost of Funds based Lending Rate (MCLR) by 15 basis points across all tenors, with effect from May 10. Following the reduction in rates, the one year MCLR came down to 7.25 per cent per annum from 7.40 per cent. As a result, EMIs (Equated Monthly Instalment) on eligible home loan accounts linked to MCLR reduced by nearly Rs 255 for a 30-year-loan of Rs 25 lakh.
In a separate development, SBI has cut interest rates on fixed deposits (FDs) by up to 40 basis points (bps) across all tenors. The new rates on retail term deposits are applicable from May 27, according to data available on the bank's website. The country's largest public sector lender also cut rates on bulk deposits of Rs 2 crore or more by up to 50 bps. The revised rates under this category are also applicable from Wednesday.
The development came after the RBI last week lowered its repo rate by 40 bps to 4 per cent. The reverse repo rate was also reduced by 40 bps to 3.35 per cent.
By Chitranjan Kumar