RBI – EMI Moratorium on Loans extended to 31st August 2020

Moratorium, also referred to as EMI holiday, is offered to help individuals or businesses facing temporary financial difficulties. Due to the unfortunate and heavy blow of the pandemic crisis of Covid 19, it has become difficult for public, in general, and businesses, to handle their personal expenditure, let alone worrying about the bank loans and EMIs.

With the nationwide lockdown extended to May 31st., the Reserve Bank of India Governor Shaktikanta Das, addressed the media today at 10 am.

The Reserve Bank of India (RBI) has provided some solace to the public by extended the moratorium by further three months ending August 31, 2020, which was easier ending on May 31, 2020. As the moratorium period has been prolonged, the borrowers will have extra time in their hand to pay the loan’s EMI instalments.

Majorly, the self-employed sector of the society, whose source of earning their livelihood has come to a halt, resultant of this pandemic, would have found difficult to pay their loans such as car loans, home loans etc., due to the loss in income during the lockdown period from March 25, 2020. Their credit score with the banks would have been affected adversely if there was any delay in the repayment of their loan’s EMI. Further, taking advantage of this moratorium would not call for any change in the existing terms and conditions of the loan.

But the twist in the whole relief policy being implemented by RBI is that the interest shall continue to accumulate on the outstanding amount of the term loans during the moratorium period.

The instalments, which are adjourned under the moratorium, will include the following payments falling due from March 1, 2020 to May 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) Equated Monthly instalments; (iv) credit card dues.


Though some consolation has been granted by RBI by providing and further extending this moratorium but with the blow caused by the pandemic of Covid 19 to the working sector, accumulated interest would not be providing much of an assurance to them. As they are confined to their homes, amid this lockdown and the situations aren’t expected to normalise in the coming times, the RBI might consider extending the period of the EMI moratorium which would be a humble and wise step to take.


0.00 avg. rating (0% score) - 0 votes