The Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to provide a three- month moratorium on repayment of term loans issued by them.
“In respect of term loans, insurers are permitted to grant a moratorium of three months towards payment of instalments falling due between June 1 and August 31. 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,” IRDAI said in a communication to CEOs of all insurers.
It is the second such moratorium the regulator is permitting since the COVID-19 outbreak and consequent lockdown. In April, it had allowed the insurers to grant a moratorium of three months on payment of instalments falling due between March 1 and May 31.
The decision had followed representations in this regard from industry associations to the regulator.
Permitting moratorium for three more months, IRDAI said the interest will, however, continue to accrue on the outstanding portion of the term loans during the period. The rescheduling of payments, including interest, will not qualify as a default for reporting of non- performing assets (NPAs), IRDAI said in a circular.
The regulator asked insurers to frame Board approved policy for extending relief to all eligible borrowers taking into account various factors, including remaining tenure of the loan, consortium or non-consortium lending and repayment capacity.
