RBI extends EMI moratorium - latest update

As India struggles to get back on its feet in the rest of the world, the Reserve Bank of India is exploring ways to make the life of the common man less stressful.

The first EMI moratorium was announced on 27 March 2020 and was to cover debt repayment between March 1 and May 31. As the COVID-19 pandemic still continues, it was clear that postponement expansion was needed. That is why today (22 May 2020), RBI Governor Shaktikanta Das extended the moratorium on loan repayment saying - “In view of the expansion and continued disruption of lockdown due to COVID-19, the decision to allow lending institutions has been taken. From June 1 to August 31, 2020, another three months to extend the moratorium on term loan installments.

How does an extended EMI moratorium help?

About 122 million people lost their jobs due to the outbreak of COVID-19. To add to this, self-employed individuals are struggling to make ends meet due to loss of income during the epidemic. If you are wondering, about 51% of India's workforce is self-employed! This means that a large part of India's working population is now finding it difficult to manage its expenses and pay back its debts.

The additional 3-month extension would provide some much-needed relief to these individuals. They will now be able to take out their loans such as car loans, home loans etc. If they miss an EMI payment then they run the risk of negatively affecting their credit score.

Now that the loan is deferred for 3 months, and money is not deducted from their bank accounts, most people will have little money to watch them until things start appearing.

Important points to keep in mind about EMI moratorium

Although the RBI EMI moratorium is good news for many people, what should you know here-

· The EMI moratorium is not a mandate, it is a competent provision. Banks have the right to decide whether they want to follow it or not. Individual banks will also be allowed to decide whether this moratorium will be extended to all borrowers.

· If you have decided to avail the moratorium, the EMI will be extended with interest applicable to your outstanding principal amount during the unpaid time. This will increase your overall interest cost. If you have the money to manage your loan EMI, it is best to stick to the original repayment schedule, especially if you have a notable outstanding loan amount for a loan against a home loan or property.

· The moratorium prevents payments for principal and / or interest components; Bullet repayment; Equal Monthly Installments (EMIs) and credit card dues.

Repo rate reduction

Apart from announcing the moratorium, RBI also announced a drastic reduction of 40 basis points in the repo rate to 4%. The reverse repo rate has also been reduced by 40 basis points to 3.35%.

Repo rate is the interest rate that RBI charges for the funds to be given to banks. This drastic reduction in repo rates will also reduce the lending rates to banks. Lower lending rates will give people hope to think about reinvesting. It is also said that EMI will come down on home, auto, personal and term loan rates in the near future.

Increasing interest from house-buyers as families stay at house

Although the residential real estate sector was expecting zero sales from the first quarter of the new fiscal year, the lockdown has surprisingly brought people closer to the desire to buy a house.

The current epidemic has had an unprecedented impact on the residential real estate market. With families spending more time in the home, organized real estate players have seen increasing interest among buyers. Potential buyers also include NRIs, who are demanding digital presentations from developers in metro cities. Weak rupee depreciation and low interest rates are also factors contributing to the decision.

With work-from-house being the new normal, even existing buyers are changing their existing bookings as they look for larger apartments. While the numbers are still not comparable to March quarter sales, large developers say there is latent demand but for this to translate into sales, the job market and economy will have to respond better.

Many developers feel that there will be not only a recovery, but also a rebound in residential. The decision to favor decision-making has accelerated due to houses being closed for two months. Noteworthy recovery may take 6-12 months as real estate is a highly suppressed category, but expect first-time house buyers and mid-segment buyers to take advantage given the experience in the last two months will be encouraged.

According to research, demand was seen in the top two cities in India in the last two years, with unsold inventory levels falling 7% in 2018 and 4% in 2019.

In the first 40 days of the lockdown, the Maharashtra government has reportedly seen the sale of only 3,806 properties, which earned the state a nominal amount in registration fees. Typically, the state government earns Rs 25,000 crore per year from the real estate sector. While many state governments have allowed online registration, developers say they expect not only a return but a demand for rebound.

As far as demand is concerned, there are some very interesting patterns. Developers and real estate companies are questioning people who have never visited the site and are responding to digital advertisements. It can be said that consumers are realizing the importance of owning a house. People have started research and are ready for minimal transactions. A strong demand revival is expected once the lockdown is lifted, provided people have a fixed job.

Although the outlook is more promising for the residential sector than retail and commercial, a visual recovery is at least two years away. Developers believe that the digital sales trend will also grow in the coming years as innovative sales and marketing solutions are being worked on and drone shoots and virtual tours are becoming more and more common.

Affordable Rental Housing For Migrant, Finance Minister Gives Push to Urban Poor

To relieve the real estate sector of some tension, Finance Minister Nirmala Sitharaman said that the government was extending a one-year extension to the CLSS or Credit Linked Subsidy Scheme which started in 2017 and ended on March 31, 2020. Until March 2021. This will help boost the demand for affordable housing.

The extension of the credit link subsidy scheme for a year will encourage many potential house buyers to buy houses, thereby increasing demand for affordable housing. There is currently a lot of untold inventory in the industry.

The mega-move will also help in maintaining employment as real estate is one of the largest labor intensive industries supporting around 200 allied industries. The proposed affordable rental accommodation under PPP is a welcome step. This will effectively help the issues of majority migrant laborers. Most of these urban poor live in miserable condition

Industry experts believe that the government's move to affordable housing in the last six years has been a great step forward. Its 'Housing for All by 2022' project has resulted in many soaps and incentives. In the last few years there has been a significant increase in buyer activities in the affordable segment.

Allowing new units and players to enter the affordable housing segment to build these rented dwellings, allowing manufacturing units and industries to take concessions and follow the same BOT model as road projects will do.

Important advice for apartment society residents during lockdown

Apartment societies can have anywhere from 5 families to 500 families living in the same society. Keeping so many people safe and protected is no simple task. You need to take some precautions so that no one in your society is threatened. Here's what you need to do now:

Control that enters your society

During lockdown, you are not supposed to leave your house and go out. You should practice strict social removal measures. But, you are allowed to go out when you need essential goods and you are allowed to use delivery services. Therefore, if you find anyone who is going against this order, you can restrict their entry. 

The use of a temperature gun is very important. This is one of the early warning signs of the virus and if you use this gun at points of entry, you can easily stop the spread of this corona virus. The temperature gun needs to be given to all security guards and they need to be trained on how to use it and how to report their findings.

Implement contact less delivery

If you are offering groceries and other essentials, opt for contactless delivery. This means that the delivery person will not be allowed to enter the society. They will be asked to leave the package at the gate, and you will have to collect it yourself. In this way less germ and less risk is brought into the society. You can pick it up whenever you want and cannot afford to come in contact with anyone from outside the society.

Shut down all Building facilities

Facilities such as gyms, children's play areas or parks, swimming pools, and others need to be closed immediately. This is to prevent people from gathering together and encourage social distance. But more importantly, people can be prevented in these facilities to avoid any viruses on the surfaces of the devices. The virus remains active for different periods of time on different surfaces, so no risk should be taken. You can always be fit and exercise at home.

Keep sanitizers at all entry points

When you leave your building and return, be sure to clean your hands before entering. Leave the bottles of sanitizer with the security guard and ask them to make sure that whoever enters the building uses it. It is also a good idea to have a sanitizer by lift so that people use it before and after using the lift.

Keep your employees safe

If you still have employees coming to work, such as security guards and maids, educate them and teach them how to properly wash their hands, maintain social distance, and wear masks during work. Provide them with the right tools so that they are not at risk of getting a virus or spreading the virus.

India Increase Returns Office for Life Increase COVID-19 Lockdown

The Ministry of Home Affairs has circulated new guidelines for Work From Office (WHO), making social distinction mandatory in the fields. Businesses prepare to work with the new normal.

India Increase will need to reorganize most of its office locations once the lockdown is dealt with large-scale behavior and physical relocation on the card.

Businesses set to follow social disturbances, implement shift-based work, go virtual with meetings, upgrade frequent cleaning systems and redefine offices for provision of hand sanitize, biometric removal.

Many companies are integrating new norms with better employee safety as their focus. Optimizing the use of office space is no longer a mandate.

A roster-based system of attendance, scattered mealtimes, ample space between workspaces, no gathering in common areas. Some companies are going to the extent of not allowing outside visitors as possible within the office premises.

Some companies are offering real-time guidance to employees as the COVID-19 situation continues to develop in India. Only a few employees, who perform essential services, remain on site in our offices. Most companies are of the opinion that they will only call employees working on important projects and the rest of the employees may continue to work from home for a few more weeks in the interest of safety.

STAY HOME, STAY SAFE, STAY ALIVE