The State Bank of India (SBI) has announced that it will extend the postponement of payments by another 3 months. This is applicable to all eligible borrowers without waiting for their request.
Since the RBI allowed banks to extend payment postponements, many have wondered if such an extension will be automatic or not.
On Wednesday, the bank stated it reached out to all eligible loan customers for their consent to stop current instructions. These instructions mostly pertained to EMIs due in June, July and August 2020.
For implementation of this system, the bank chose to use the SMS communication means. It sent an SMS to close to 8.5 million eligible parties seeking consent to stop EMIs. Borrowers must reply with a “yes” to a designated virtual mobile number. The reply must be sent back to the bank within 5 days of receiving the SMS, if they want to defer their EMIs.
SBI said, on May 22, 2020 that close to 20% borrowers have opted for the further postponement. The RBI’s extension of the ongoing postponement shall help tackle cashflow disruptions. Further, it would also aid in cases when a one-time debt recast relief is absent.