IRDAI issues moratorium on repayment of term loans

Apr 10, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Insurance Regulatory and Development Authority of India (IRDAI) on April 08, 2020, has decided to reschedule the term loans due to the outbreak of COVID-19 pandemic. IRDAI had received representations from industry associations seeking moratorium on repayment of term loans sanctioned by the Insurers.

Thus, the Authority in reference to the RBI directions has given the following instructions:-

a) In respect of term loans, insurers are permitted to grant a moratorium of three months towards payment of instalments falling due between March 01, 2020 and May 31, 2020. The repayment schedule for such loans and residual tenor, will be shifted across the board by 3 months subsequent to the moratorium period.

b) Interest shall continue to accrue on the outstanding portion of the term loans during such moratorium period.

c) The asset classification of term loans which are granted relief shall be determined on the basis of revised due dates and revised repayment schedule.

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

e) Insurers shall frame Board approved policies to extend above mentioned reliefs to all eligible borrowers.

f) 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.

[Circular No. IRDA/F&I/CIR/INV/085/04/2020]


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