During the Corona crisis, many businesses, especially MSMEs faced a lot of challenges like a liquidity crisis, high default risks, supply shocks, shortage of labour and non-payment of dues. To counter these issues, the RBI announced the EMI moratorium scheme.
Under this Moratorium Scheme, individual term loan borrowers can get an EMI moratorium of 3 months on loans outstanding as of March 1st, 2020. The borrowers would be exempt from paying EMI for 3 months.
This scheme was launched as a breather for the salaried class which faced hardships in being employed or getting paid due to the Corona crisis.
However, the moratorium was only a postponement of the EMI payment and not a waiver. The RBI's wording explicitly states that the tenor for term loans may be extended by three months across the spectrum. To be clear, the loan will be paid off three months later than the original schedule.
All kinds of term loans were covered under this Moratorium scheme:
During the moratorium, interest will continue to accumulate on the unpaid portion of the term loans, according to the RBI release. It basically means that even though you don't pay your EMI until May 2020, you won't be considered a defaulter, and your CIBIL™ score won't be affected.