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PSU Banks Announce Deferment of EMI Payments for Three Months Following RBI Order

Professor of Financial Economics and Part-time Value Investor, Transfin.
Apr 2, 2020 2:47 AM 4 min read
Editorial

PSU banks announce deferment of EMI payments for three months following RBI order. Merger of six PSU lenders into four effective from today. Starting today, interest rates on small savings schemes will be slashed. New income tax rules go into effect today.

 

 

RELIEF BY RBI

RBI announces more measures to mitigate impact of the coronavirus outbreak. Increases WMA limit of states, UTs by 30%, relaxes export rules.

A Helping Hand

The Central Bank has announced more measures, more business-specific this time around, to mitigate impact of the coronavirus outbreak on the Indian economy. 

 

These include:

  • Extension of realisation period of export proceeds by six months
  • Increased the Ways and Means limits for state governments and Union Territories by 30% from the existing limit
  • Deferred the activation of counter cyclical capital buffer for a period of one year

 

For a deep dive into the measures announced, click here. [HT]

 

These are in addition to the steps announced by the RBI last week, including the infusion liquidity of about ₹3.74Lcr ($49.6bn) into the financial system, slashing of repo rate to 4.4% from 5.15% earlier, and allowing deferment of all loan repayments until June 30th, subject to individual bank policy.

 

A closer look at the measures announced by the RBI amidst the coronavirus pandemic and lockdown here. [TRANSFIN.]

 

EMI MORATORIUM

PSU banks announce deferment of EMI payments for three months following RBI order.

A Bank in Need is RBI Indeed

The RBI Governor last week allowed borrowers to not pay any equated monthly installments (EMIs) for loans for three months, subject to individual bank policy, within the backdrop of the ongoing slump in the economy, particularly owing to the coronavirus pandemic. 

 

And towards this effect, some PSU banks, including SBI, PNB, Bank of Baroda, Union Bank of India, IDBI and others, have offered loan EMI moratoriums to their customers. Here's a look at what each of them had to say. [ToI]

 

Following Suit

India’s largest private sector lender by assets HDFC Bank also announced moratorium on loan EMIs. Here are the details of seeking one, as published on the bank's website. [ET Wealth]

 

Following suit, ICICI Bank also allowed its customers to defer EMI payments on term loans till May 31st 2020. [Livemint]

 

Merger of six PSU lenders into four effective from today. 

Merger Successful

The Government's mega merger plan of merging six PSU lenders into four to make them globally competitive comes into effect today. [Moneycontrol]

 

SLOWDOWN

Industries suffer under dual hit of economic slowdown and COVID-19 crisis.

Two Tirades Together

India’s auto industry was already reeling under a brutal slowdown for months before COVID-19 struck the country. Since then, the 21-day nationwide lockdown has further aggravated the auto crisis. Numbers released today affirmed this.

 

The country’s largest carmaker, Maruti Suzuki, has reported a 47% Y-o-Y decline in total sales (domestic and exports) in March at 83,792 units, down from 158,076 units last year. Domestic sales when taken alone had dipped by 47.6% in the same period. [ET Auto]

 

Meanwhile, Ashok Leyland reported a staggering 91% drop in domestic sales to 1,787 units. And Eicher's Commercial Vehicle sales dropped by 81% to 1,409 units during the month from 7,329 units a year ago. [BS]

 

MONEY MATTERS

Starting today, interest rates on small savings schemes will be slashed.

Set for Low

Starting today, interest rates on some small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and others will earn lower interest for Q1 of FY21 (April - June). By how much were interest rates for these schemes cut an what does this mean for you? Read this article for details. [India Today]

 

New income tax rules go into effect today.

New Rules

Beginning today, the new financial year will herald in some changes in income tax rules. These include new tax slabs and deferment of tax payments on shares allotted to start-up employees. Click here to read about five changes in income tax rules that will come into effect today. [Business Today]

 

Extra Crunch

By the way, speaking of income tax, do you want to learn about how to pay less in income tax by availing income tax deductions and income tax exemptions? Read this article for details. [TRANSFIN.]

 

US

US could see 100,000 to 240,000 coronavirus deaths, White House warns.

 

Crisis Mode

100,000-240,000 deaths. That’s what the US could be staring at according to the White House if the coronavirus crisis continues to escalate in the country. Already, the US has seen more than 189,000 confirmed cases – more than any other country – and its death toll has passed 4,000, a number higher than China’s, where the coronavirus originated, but lower than Italy’s 12,000+. With the virus’s footprint swiftly expanding across the States, regional governments have imposed lockdowns and restrictions and Washington has extended federal social-distancing norms until the end of April. [WSJ]

 

Fed launches new lending facility for foreign central banks.

Contingency Measures

The Federal Reserve has said it would launch a temporary lending facility that for the first time will allow foreign central banks to convert their holdings of Treasury securities into Dollars, its latest bid to alleviate strains in global markets. [MarketWatch]

 

Xerox drops HP takeover bid. 

Meanwhile...

Xerox has announced that it would be dropping its hostile takeover bid of HP amidst the global economic uncertainty caused by the coronavirus pandemic. [TechCrunch]

FIN.

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