The Reserve Bank of India on Friday asked all lending institutions to allow three-month moratorium on equated monthly instalment (EMI) payments in order to infuse liquidity into the system as the economy grapples with Covid-19 challenges.
It has also allowed banks for deferment of interest on working capital loans for the next three months - until June 2020.
RBI Governor Shaktikanta Das in a press conference said these are extraordinary circumstances, and unprecedented measures are required to support the sagging economy as all the economic activities have come to a halt.
The liquidity measures announced by the RBI will make available a total Rs 3,74,000 crore to the country's financial system.
Mr Das said that the deferment on loan and interest repayments will not be classified as defaults and will not impact credit history of borrowers.