I have loans from 3 banks. HOME MORTGAGE loan (Bank A), VEHICLE LOAN ( Bank B) & BUSINESS LOAN ( Bank C). I was paying EMI regularly for all the loans till March 31st 2020. RBI announced the moratorium on all term loans on 27th March for 3 months from 1st march 20 to May 31st 20 on an opt out basis.
I wrote to all the banks on their Email ID within 1 week of the announcement by RBI requesting moratorium. Although I recd a acknowledgement from bank A regarding receipt of my mail, the other two did not even acknowledge receipt of e mail. When I enquired with the customer care of all the banks, all of them said that they were short staffed due to lockdown and they would reply once the operations become normal.
However 1 bank (B) continued to deduct EMIs from my account inspite of my request for moratorium. I had kept the money in the bank for disbursing salary to employees.
Later when the second set of moratorium for 3 more months was announced by RBI on May 17th to be implemented on opt in basis, I again applied to all the banks through email . However all 3 banks responded this time with different responses.
1. Bank A told me that june EMI has to be paid as the due date for applying for june was over. They gave me moratorium for july & august.
2. Bank B told me that they are giving moratorium only for the month of June & that I have to apply for the months of july and august separately each month well before the due date.
3. Bank C told me that since I had not paid for the month of april and may, the moratorium request for june, cannot be processed till outstanding dues r cleared.
However they kept hitting my account on the EMI date but could not debit any money as I did not have sufficient balance.
After august 31st , I started receiving collection calls from agencies to pay the EMIs from September.
I told them that since I had paid for the month of march , that EMI has to be adjusted for september and other EMIs deducted by them in April & May will also need to be shifted across the board. This meant that I do not have to pay 2 banks till November 2020 as they continued to deduct my EMi till may 2020 & one bank had to adjust my EMI till september to compensate for march only.
While one bank agreed (A) to compensate me for September, other 2 banks did not agree and r sending legal notices to clear the dues.
My Questions are
1. Should March EMI if paid be adjusted for june/september.
2. If RBI has announced moratorium for 6 months, can banks at their discretion allow a shorter period on arbitrary grounds such a) as march month EMI cannot be shifted as it is already paid b) due date for applying is over etc.
3. If the banks have deducted EMI for march, april, may, should they refund that money if they are not willing to compensate for sept, oct & november.
4. Can banks send legal notices for non payment of sept, oct EMI without opening the online link for covid restructuring as mandated by RBI?
Asked 2 years ago in Civil Law
Some of u have answered that the bank need not 1) Grant moratorium for 6 months as directed by RBI 2) refund the already paid EMI for March (retrospectively granting relief as per RBIs circular 3) compensate for EMI deducted in subsequent months also even if the bank has deducted after the intimation to avail moratorium has been made by the borrower. Some of you have based ur opinion on the fact that A) Moratorium was not granted to borrowers as a matter of right, but as a matter of privilege to enable some borrowers to avail relief from the devastating effect of covid induced lockdown on the economy. Some of you have said that B) the banks need not refund the money once paid as such money is not illegally claimed but is actually adjusted towards outstanding dues as per loan agreement. C) Some of you have said that the bank does have discretionary power in deciding who will be granted moratorium and by how much.
My question is
1) If banks and lending institutions r licensed by RBI, can banks go against RBIs instructions in letter & spirit.
2) RBI mentions that All term loans are eligible for moratorium from March if their accounts r labelled as standard as on 1st March 2020. It does not differentiate between term loans whose EMIs r paid in march and whose EMIs r not paid for march. This being the case, do banks have the power to exclude one group of borrowers for relief even if granted by RBI for the month of march.
3) If Covid moratorium is called a privilege, (Definition of privilege is-a right, advantage or immunity granted to one class of ppl) then shouldnt that privilege, right or advantage or immunity be equally applied within that class of ppl.
4) RBI granted relief to borrowers as lockdown had a devastating effect on the economy in terms of disruption in demand, supply chain, workforce etc.Can banks remain mute spectators & refuse 2 take their share of the burden prioritizing profit like normal times instead of saving livelihoods in abnormal times
Asked 2 years ago