IRDA allows 3 months moratorium on repayment of term loans sanctioned by insurers

IRDAI has allowed insurers to grant a moratorium of three months towards payment of instalments falling due between 1st March, 2020 and 31st May, 2020. The repayment schedule for such loans and also the residual tenor, will be shifted across the board by three months subsequent to the moratorium period. 

 

Hyderabad:

Providing relief to the Covid-19 pandemic stricken Indian Inc, in line the Reserve Bank of India's earlier move, the insurance regulator IRDAI has now allowed insurers to grant a moratorium of three months towards payment of instalments falling due between 1st March, 2020 and 31st May, 2020. The repayment schedule for such loans availed by the India Inc and also the residual tenor, will be shifted across the board by three months subsequent to the moratorium period. 

 

The IRDAI had received representations from industry associations seeking moratorium on repayment of term loans sanctioned by the insurers.

 

The  RBI had issued directions pn 27th March, 2020, providing certain moratorium to the borrowers of term loans

 

Considering the cashflow problems faced by the borrowers and in line with the RBI directions,the IRDAI, while providing moratorium on repayment of term loans,has issued the following instructions- 

-Interest will continue to accrue on the outstanding portion of the term loans during such moratorium period.

-The asset classification of term loans which are granted relief as per point no.(a) above shall be determined on the basis of revised due dates and revised repayment schedule.

-The rescheduling of payments, including interest, will not qualify as a default for the purpose of reporting of NPAs.

- Insurers shall frame board approved policies to extend above mentioned reliefs to all eligible borrowers.

-Concurrent auditors in their reports for the quarter ending June, 2020 shall confirm that the insurers have complied with the Board Approved policy in granting moratorium.


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