John Deere Financial India Private Limited
Policy on Implementation of Covid -19 Regulatory Package by Reserve Bank of India Reserve Bank of India
(RBI) has released circular “COVID 19 Regulatory Package” on March 27, 2020 to address the financial stress and disruptions caused to the borrowers by COVID 19. RBI has permitted all lending institutions including Non-Banking Finance Companies(NBFCs) to grant moratorium of three months for installments falling due between March 01, 2020 and May 31, 2020. RBI mandated that all lending institutions including NBFCs establish a board approved policy.
John Deere Financial India Private limited (JDFIPL) is a NBFC registered with RBI as an Asset Finance Company. JDFIPL is establishing the present policy in line with the guidelines referred vide circular DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27, 2020 (the Circular) for its customers in India on a nationwide basis immediately .
Under the Circular, JDFIPL is permitted to grant a moratorium of up to three months on payment of all instalments falling due on and after March 1, 2020 to and including May 31, 2020 on term loans. The repayment schedule for such loans and the residual tenor, will be shifted by up to three months after the moratorium period ends. Interest shall continue to accrue at the regular contract rate (not past due rate) on the outstanding portion of the term loans during the moratorium period.
This program is provided to enable customers to overcome the financial stress of repayment of installments due to the economic fallout from COVID-19. However, this program is not a waiver of JDFIPL’s rights and remedies under the loan agreements and the relief granted to customers will not result in an asset classification downgrade.
This Policy is valid up to and including May 31, 2020 or to such later date RBI may declare.
The Moratorium Scheme will be implemented for customers falling under the eligibility referred above and those customers who are willing to Opt-in for moratorium and remaining customers continue to pay the installments on the regular due dates as per the original Contractual terms
List of eligible contracts where moratorium scheme to be implemented will be approved by JDFIPL approving authority. Moratorium Scheme will be implemented as mentioned below.
Subject to RBI approval, Installments due on and after March 1, 2020 to and including May 31, 2020 in the month of March, April or May 2020 will be given the option of moratorium of 6 months to match with the cash flows and cropping cycle. The payment structure would shift by this installment amount for another 6 months and the principal and interest will be payable and collected with the installment due immediately after the moratorium period ends.
A moratorium is an extension which means temporary postponement of Loan installments (not a waiver). The Reserve Bank of India has allowed Lending Institutions (all banks, including non-banking financial companies) to grant a three-month extension on payment of loans falling due between March 1st 2020 and May 31st 2020. Accordingly, the residual tenor of repayment schedule will be extended by three months.
Yes, unless you have specific approval granting moratorium from your Lending Institutions, your Installments will still be deducted from your account.
Yes, The RBI circular mentions, “The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period.”
Once relief has been granted specific to the installments under program by your Lending Institutions, non-payment will not result in any impact on credit score.
This is not a waiver, but a deferment. You will have to pay the Installments along with interest accrued for 3 months moratorium at a later date as decided by the Lending Institution. As per RBI, Lending Institutions need to have a board approved policy in place on moratorium/deferment.
If you wish to make the payment of your Installment during this moratorium period, it will be continued as per existing repayment schedule. This saves you from any additional interest of moratorium.
Yes, the moratorium is a ‘payment holiday’ however, the interest will continue to accrue at the initial contractual rate.
It is applicable for all type of installments falling due between during 1st March and 31st May 2020.
The RBI clearly defined that if you could not pay your Installments and choose to extend the loan by three months, you will end up paying interest cost for these additional three months on outstanding loan amount as per loan agreement
Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period and the same will be added in the loan outstanding which might result in an increase in your Installment. Post completion of the relief period, the repayment schedule for such loans as also the residual tenor, will be shifted across the board up to three months post moratorium.
In case you have any overdue installments and/or passed due/default pertaining to the loan repayment prior to 1st March 2020, we request you to kindly pay such overdue installments/other amount overdue immediately, to avoid penal charges, down-gradation of account and slippage in credit rating.