InvestorQ : Why are banks demanding a one-time restructuring of loans rather than an EMI moratorium? What is the difference?
Ria Jain made post

Why are banks demanding a one-time restructuring of loans rather than an EMI moratorium? What is the difference?

Answer
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Anu Biswas answered.
4 months ago


In its monetary policy announcement on Friday, the RBI extended the EMI moratorium by another 3 months till August 31st. This moratorium extension was to originally expire on May 31. However, the RBI has been silent on the issue of one-time restructuring of loans demanded by industry. It needs to be remembered that EMI moratorium is only a deferment or postponement of EMIs. Such outstanding EMIs will have to be closed out before end of the fiscal year. The RBI has also allowed the deferment of interest payments on working capital loans as well as term loans. During this period, the interest will continue to accrue for that period. In most large banks, 20% to 30% of the borrowers had opted for the EMI deferral scheme. On the EMI Restructuring would amount to a one-time waiver of liabilities. Even a partial waiver in line with the stoppage of business would have been useful to customers and would have helped reduce the payout burden.