RBI lets banks freeze credit card EMIs, but the meter keeps running
RBI's COVID package allows a three-month moratorium on term loans and credit card dues falling due between March 1 and May 31, 2020, with no credit-score hit. Interest keeps compounding through the pause, so deferring costs more than paying.
The Reserve Bank of India just handed every cardholder a pause button. Under its COVID regulatory package, banks can offer a three-month moratorium on term loans and credit card dues falling due between March 1 and May 31, 2020. Opt in and your repayment slides to August 2020 with no hit to your credit score.
Read past the headline before you touch that button. The moratorium defers repayment — it does not defer interest. Your outstanding dues keep compounding through the entire pause, at credit card rates, which means the “relief” is a loan against your future self at the worst pricing in Indian consumer finance.
The rule went from “full EMI and card dues owed, no exceptions” to “deferred to August, interest still accruing.” That second clause is doing all the work, and plenty of cardholders who opt in without reading it will get a nasty surprise on their next statement.
Our take: if you can pay, pay. The moratorium is oxygen for people genuinely out of cash — for everyone else it’s the most expensive convenience the RBI has ever authorised.