Governments and lenders provide loan moratoria to help struggling borrowers, particularly during an economic crisis. While it can provide relief to borrowers, such a policy also has a possibility of inducing moral hazard among the beneficiaries.
In this blog post-through a case study, we analyse how microcredit borrowers availed the debt moratarium and through that identify how much they may have been impacted by COVID-19 and lockdowns.
Must the Most Vulnerable Bear the Highest Costs? The Case of Interest on Interest during the Debt Moratorium
In this post, we investigate the cost of Interest on Interest (IoI), that emerged out of the RBI’s policy to grant a 6-month debt moratorium
In the wake of COVID-19 related lockdown and the resultant impact on the financial lives of millions of households, the Reserve Bank of India (RBI) approved a series of regulatory measures, which among others, enabled lending institutions to provide their borrowers with a 6 month-repayment moratorium on term loans. A debt moratorium at this scale […]
Given the extent of liquidity shock caused by Covid-19, the Reserve Bank of India enabled all lending institutions to provide their borrowers with a repayment moratorium on term loans until 31 August 2020.