COVID-19 Policy

Policy Consequent to the COVID-19 Regulatory Package

The Reserve Bank of India (RBI), vide DOR. No. BP. BC. 47 / 21.04.048/2019-20 dated 27th March 2020 announced a regulatory package to mitigate the burden of debt servicing brought about by disruptions on account of COVD-19 pandemic and to ensure the continuity of viable businesses.

Subsequently, RBI issued guidelines on Covid-19 regulatory package dated May 23, 2020 to offer extension of moratorium on payment of term loan instalments / deferment of interest on working capital facility(ies) falling due between June 1, 2020 and August 31,2020.

The moratorium extended basis the earlier notification ended on 31st May, 2020

Axis Finance Ltd will offer the facility of relief under the COVID – 19 Regulatory Package as an option to all its eligible borrowers – retail and wholesale – across all products, for moratorium or for making payment as per current schedules.

Moratorium will be granted to eligible borrowers in respect of the facilities taken from Axis Finance Ltd (AFL) as under:

Term loans: In respect of all term loans (including retail and consumer durable loans), AFL may grant a moratorium of three months on payment of instalments falling due between June 1, 2020 and August 31, 2020. For this purpose, Instalments will include the following payments falling due from June 1, 2020 to August 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period. In respect of loans under wholesale segment, an eligible borrower may submit their request for relief to AFL inter alia stating that its business has been affected by the COVID -19 pandemic and the relief that may be granted to them shall be assessed by AFL on case to case basis.

Working capital facilities: In respect of working capital facilities sanctioned in the form of overdraft (OD), AFL may defer the recovery of interest applied in respect of all such facilities during the period from June 1, 2020 up to August 31, 2020 (“deferment”). The accumulated accrued interest shall be recovered immediately after the completion of this period.

The relief package will not be granted to borrowers who have been classified as Fraud or Wilful Defaulters and also who are already in NPA / Stage-3 category.

Since the relief through moratorium / deferment is being provided specifically to enable the borrowers to tide over economic fallout from COVID-19, this will not be treated as concession or change in terms and conditions of loan agreements due to financial difficulty. Consequently, such a measure, by itself, shall not result in asset classification downgrade and will not impact the credit rating of the borrower.

The asset classification of term loans which are granted relief as above shall be determined on the basis of revised due dates and the revised repayment schedule.

Similarly, working capital facilities where relief is provided as above, the SMA status shall be evaluated considering the application of accumulated interest immediately after the completion of the deferment period as well as the revised terms, as permitted.

The rescheduling of payments, including interest, will not qualify as a default for the purposes of supervisory reporting and reporting to Credit Information Companies (CICs). CICs shall ensure that the actions taken by lending institutions pursuant to the above announcements do not adversely impact the credit history of the beneficiaries.

Further, we would like advise our customers that take the benefit under this package only if there is disruption in cash flows due to the pandemic / lock-down. Interest on the loans will continue to accrue in the loan account and will result in a change in the outflow to our customers.