COVID19 POLICY

COVID19 – BORROWER MANAGEMENT POLICY AS PER RBI GUIDELINE DATED MARCH 27, 2020

OBJECTIVE:

The objective of this policy is to provide relief to the borrowers of the Company brought about by disruptions on account of COVID-19 pandemic in line with RBI Notification titled ‘COVID -19 – Regulatory Package’ dated March 27, 2020

SCOPE AND APPLICABILITY:

  • This benefit of this policy will be extended to all the active borrowers of the Company as on March 1, 2020
  • This policy will be effective only with relation to the EMI instalments falling due from the borrowers between March 1, 2020 and May 31, 2020.
  • The relief granted hereunder is being provided specifically to enable the borrowers to tide over economic fallout from COVID-19, the same will not be treated as concession or change in terms and conditions of loan agreements signed between the Company and the borrowers.

RELIEF:

Pursuant to the guidelines of RBI the Company may at its discretion grant the following relief to active borrowers as on March 1, 2020 –

  • Mr. George Thomas, Advisor to the Company to consider and approve deferment of loan on a month on month basis of all installments falling due between March 1, 2020 and August 31, 2020.
  • Interest shall continue to accrue on the outstanding portion of the term loans during the deferment period and loan tenure shall stand extended by the period of deferment.
  • Additional accrued interest shall be collected at the end of the deferment period/ at the tail end of the extended period at the discretion of the Company and the Company shall communicate the modality of collection of the accrued interest in due course in writing to such borrower. Accrual of interest for the borrowers who does not pay during one or more months during this period is illustrated in the annexure.
  • Monthly SMS notification of demand to the borrowers for the month shall continue to be sent to borrowers with appropriate modifications in line with restrictions on movements as imposed by the state or central government or its agencies at the time of the notification.
  • Fortnightly Action Taken Report and suitable MIS shall be sent to the Board of Directors.
  • Any borrower who is not willing to defer installment shall be permitted to continue payment as per his repayment schedule.
  • All accounts which were classified as standard as on February 29, 2020, even if overdue, the moratorium period (i.e. moratorium of six months on payment of all loan installments falling due between March 1, 2020 and August 31, 2020, wherever granted), shall be excluded from the number of days past-due for the purpose of asset classification. Non – payment of installment by these borrowers shall not result in asset classification downgrade. Accounts which are not standard as on February 29, 2020 shall be classified as per number of days past due.
  • Except the foregoing there shall not be any change in terms and conditions of loan agreements or the policies of accounting and reporting followed by the Company.

Assumptions:
Loan O/s as on 29-02-2020 60,000
Actual closure Date: 12/31/2020
ROI 24%

Illustrations:
Borrower A: Doesn't pay all the three EMIs due in the month of March, April and May'2020
New closure date : 3/31/2021
Month Mar-20 Apr-20 May-20 Total
EMI Due 5,000 5,000 5,000 15,000
EMI Paid - - - -
Interest on non payment 101.64 199.27 311.89 612.79

Borrower B: Doesn't pay only one EMI due in the month of March, April and May'2020
New closure date : 1/31/2021
Month Mar-20 Apr-20 May-20 Total
EMI 5,000 5,000 5,000 15,000
EMI Paid - 5,000 5,000 10,000
Interest on non payment 101.64 100.64 106.04 308.32

Month Mar-20 Apr-20 May-20 Total
EMI 5,000 5,000 5,000 15,000
EMI Paid 5,000 - 5,000 10,000
Interest on non payment - 98.63 103.93 202.56

Month Mar-20 Apr-20 May-20 Total
EMI 5,000 5,000 5,000 15,000
EMI Paid 5,000 5,000 - 10,000
Interest on non payment - - 101.92 101.92

Borrower C: Doesn't pay any of the two EMIs falling due in the month of March, April or May'2020
New closure date : 2/28/2021
Month Mar-20 Apr-20 May-20 Total
EMI 5,000 5,000 5,000 15,000
EMI Paid 5,000 - - 5,000
Interest on non payment - 98.63 205.85 304.48

Month Mar-20 Apr-20 May-20 Total
EMI 5,000 5,000 5,000 15,000
EMI Paid - 5,000 - 5,000
Interest on non payment 101.64 100.64 207.96 410.23

Month Mar-20 Apr-20 May-20 Total
EMI 5,000 5,000 5,000 15,000
EMI Paid - - 5,000 5,000
Interest on non payment 101.64 199.27 209.97 510.87