RBI extends moratorium on EMI’s

The Reserve Bank of India has extended EMI moratorium on term loans for three more months i.e., up to 31st August.

Moratorium on EMI means that the borrowers wouldn’t have to pay EMI installments during the period of moratorium.

The decision came at a time when all of the nation is going through the corona virus pandemic. It is relief for small scale borrowers and the self-employed, as it would have been difficult for them to earn during the lockdowns. So, repaying car loans or housing loans won’t become a burden on these households.

Further RBI has also cut the repo rate by 40 basis points i.e., from 4.4% to 4.0%. The reverse repo rate has also been cut to 3.35%. This has been done to revive the economy from collapsing as there is no money in the markets due to low market activity.