The recent lockdown to prevent the spread of COVID-19 has led to financial disruption in the economy including the RBI’s EMI Moratorium facility.

This has led many businesses to pause their operations, especially those businesses that do not fall under the essential services category. This has caused many small businesses and individuals to forgo their stable income sources.

This has led the Reserve Bank of India to instruct lenders like Banks, NBFCs, Housing Finance Companies, and other financial entities to grant a three-month moratorium to all borrowers on their Equated Monthly Instalments (EMI) on repayments of term loans and credit card dues.

This was a much-needed abatement for borrowers who may face liquidity issues amid the financial disruption caused by the pan India mandated lockdown.

But remember, a Moratorium is not a waiver.

So, what is moratorium all about, let us take a closer look.