Many people ask this question, when the EMI moratorium was extended till 31-Aug-2020 - Whether my credit rating by Credit Information Bureau (India) Limited (CIBIL) will go down due to this?
RBI in their press release under Statement on Developmental and Regulatory Policies dated 22-May-2020 cleared this that the moratorium period between 1-Mar-2020 and 31-Aug-2020 shall not be counted for asset classification by lenders. That means, your non-payment of interest or EMI shall not be adversely affect your credit rating.
What is assert classification, NPA? To know, click HERE (Refer FAQ 3)
The relevant portion of the notification is given below:
(i) As the moratorium/deferment is being provided specifically to enable borrowers to tide over COVID-19 disruptions, the same will not be treated as changes in terms and conditions of loan agreements due to financial difficulty of the borrowers and, consequently, will not result in asset classification downgrade.
(ii) As earlier, the rescheduling of payments on account of the moratorium/deferment will not qualify as a default for the purposes of supervisory reporting and reporting to credit information companies (CICs) by the lending institutions. CICs shall ensure that the actions taken by lending institutions in pursuance of the announcements made today do not adversely impact the credit history of the borrowers.
(iii) In respect of all accounts for which lending institutions decide to grant moratorium/deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall also exclude the extended moratorium/deferment period. Consequently, there would be an asset classification standstill for all such accounts during the moratorium/deferment period from March 1, 2020 to August 31, 2020. Thereafter, the normal ageing norms shall apply.
(iv) NBFCs, which are required to comply with Indian Accounting Standards (IndAS), may follow the guidelines duly approved by their Boards and advisories of the Institute of Chartered Accountants of India (ICAI) in recognition of impairments. Thus, NBFCs have flexibility under the prescribed accounting standards to consider such relief to their borrowers.
For full notification dated 22-may-2020, CLICK HERE
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