View All Covid-19 - Relief Package


The South Indian Bank Ltd


Reserve Bank of India has announced certain regulatory measures to mitigate the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic.

FAQ on Covid-19 - Relief Measures

1.      Which are the facilities eligible for availing the benefits under the RBI Covid- 19 regulatory package and whether the facility is extended across the board to all borrowers?


All Term Loans (including Agricultural Term Loans, Retail, Crop Loans) and Cash Credit/Overdraft are eligible to avail the benefits under the package. This is available to all such accounts, which are Standard Assets as on 1st March 2020. Further, to avoid hassle of paperwork the facility has been extended across the board to all the borrowers by extending repayment of Term Loan instalments (includes interest) by 6 months. The original repayment period for Term Loans will get extended by 6 months e.g. a loan repayable in 60 instalments maturing on 1st March 2024 will mature on 1st September 2024.


2.      Is rescheduling of payments applicable for all kinds of Terms Loans?


It is applicable for all Term Loans in all the Segments, irrespective of the Segment and the tenor of the Term Loans.


3.      Is rescheduling of Term Loans only for Principal amount or it also includes interest?


Rescheduling of Principal can be done for a period of six months falling due between March 1, 2020 and August 31, 2020. For example, where the last instalment of a Term Loan falls due for payment on say 1st March 2020, it will become payable on 1st September 2020.

For EMI based Term Loans, it will be six EMIs falling due between 1st March 2020 and August 31st, 2020 and the tenor will be extended by six months and have to be repaid during the extended period, as per the example under (2) above.


For other Term Loans, it will be all the instalments and Interest falling due during the same period, irrespective of the tenor of payment i.e. Monthly, Quarterly, Half Yearly, Annually, Bullet Payment etc. For Term Loans, where the repayment has not commenced, the interest portion for three months alone needs to be reckoned. 


4.      Regulatory Package for the Working Capital facilities.


The recovery of Interest applied to Cash Credit/Overdraft on 31st March, 30th April, 31st May 2020, 30th June, 31st July and 31st August is being ‘deferred’. However, the entire interest will be converted as a Funded Interest Term Loan which has to be repaid within March 31, 2021. Borrower will have the option to pre-pay the loan without incurring a pre-payment charge.


5.      Whether businesses/ Individuals should necessarily take the benefit?


The Borrowers may avail the benefits under this package if there is a disruption in the cash flows or there is loss of income. However, they must take into account that the interest on the loans, though not mandatorily payable immediately, are only getting postponed by 6 months, continues to accrue on these accounts and results in higher cost.


6.      Will all these measures of RBI be treated as “restructuring”? What about the provisions applicable?


The measures stipulated by RBI under the March 23, 2020 circular on COVID 19 Regulatory Package will not be treated as “Restructuring” and hence will not result in asset classification downgrade. Accordingly, the enhanced provisions for Restructured Accounts will not apply.


7.      What is the process to be followed for getting the benefit of this moratorium?

Bank will provide this relief to all borrowers across the board. For availing this facility, borrower do not have to submit a separate application. If any borrower is not willing to avail this facility, they can give a declaration to the branch that they are not willing to avail and the scheme. The declaration should reach the branch before June 15, 2020 through e-mail or otherwise. For such borrowers the scheme will be withdrawn and there will not be any further option to avail such facility on a future date once the declaration is submitted.


8.      What will happen to the accounts which are delinquent/ in default/overdue on or before March 01,2020


Since the relief is extended for instalments of loan which are due only between 1st March 2020 to 31st August 2020, the instalments/other amount overdue on or before 1st March 2020 will be continued with existing terms and conditions of original sanction and will not be provided any moratorium for dues before March 01, 2020.


9.      Whether this facility can be availed for Gold Loans availed which are becoming due during the moratorium period?


Yes, moratorium can be availed for gold loans which are not under interest subvention Agriculture gold loans becoming due during this period. All the gold loans due for closure during the period from March 01, 2020 to August 31, 2020 will have to be closed immediately after the moratorium period, i.e on September 01, 2020. 

For interest subvention gold loans, the interest subvention benefit will be available only if the gold loans are closed on or before May 31, 2020. Further for loans becoming due after May 31, 2020 and within August 31, 2020, such loans has to be closed within due dates to avail the interest subvention benefit. 


For any other details contact your respective branches