If you have taken a loan from any bank, then the Reserve Bank of India (RBI) has a good news for you. Often, during natural disasters – such as floods, earthquakes or cyclones – people’s business operations come to a halt, making it extremely difficult for them to repay loan installments (EMIs). Till now, resolving this issue required repeated trips to the bank; But, the rules will change from July 1. Now, banks themselves will step forward and take measures to provide relief to you. Let us understand how this new system will work.
Installment relief – no application required!
Till now the rule was that in case of any disaster, the customer had to be physically present at the bank to submit a formal request. From July 1, if there is an official declaration of a disaster in your area, the Bank will automatically apply relief measures to your loan installments without waiting for any formal request from you.
Which disasters are included in this?
RBI has clarified that this rule will be applicable only to those disasters (like flood, earthquake or cyclone) which are officially declared by SDRF (State Disaster Relief Fund) or NDRF (National Disaster Relief Fund). It is mandatory for banks to start the process of providing relief within 45 days of the declaration of disaster.
Who will benefit?
The benefit of this measure will be available only to those customers whose bank accounts fall in the “active” or “standard” category. You will be eligible for this relief only if your loan installments are not outstanding for more than 30 days. Customers who are already in default on loan repayments will not avail this benefit.
What kind of relief can be expected?
Banks may give you additional time to repay your installments. Apart from this, some options may also be given – like deferring the installments for some time or restructuring the loan.
What if you don’t want relief?
If a customer wishes to refuse this benefit and prefers to continue repaying his loan installments on time, he can request to opt out of the program within 135 days.
What if you don’t want to take advantage of this benefit?
If a customer wishes to refuse this benefit and prefers to continue repaying his loan installments on time, he can request to opt out of the program within 135 days.
This rule applies only to new loans:
This new rule will be applicable only to future loans taken after July 1, 2026. In case of existing loans, the rules already in place will continue to apply to avoid any confusion.