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RBI/2021-22/17 DOR.STR.REC.4/21.04.048/2021-22 April 7, 2021 All Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks) All Primary (Urban) Co-operative Banks/State Co-operative Banks/ District Central Co-operative Banks All All-India Financial Instituti
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FAQ :
Lending institutions must refund or adjust 'interest on interest' charged to borrowers during the moratorium period (March 1, 2020, to August 31, 2020), as per a Supreme Court judgement.
The Indian Banks' Association (IBA), in consultation with other industry bodies, will finalise the methodology for calculating the amount to be refunded or adjusted.
All borrowers are eligible, including those who availed working capital facilities, regardless of whether they fully, partially, or not at all availed the moratorium.
For the period from March 1, 2020, to August 31, 2020, asset classification will follow the guidelines set out in specific RBI circulars. From September 1, 2020, onwards, standard IRAC Norms will apply.
Asset classification for these accounts will continue to be governed by the Master Circular on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015, or other applicable instructions.
The asset classification for accounts that received moratoriums will revert to standard norms from September 1, 2020, onwards. The 'interest on interest' refund applies to the March 1, 2020, to August 31, 2020 period.
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