Credit Score to be in Line with RBI Moratorium Guidelines

On March 27, 2020 the Reserve Bank of India announced that all outstanding term loans will receive a three month moratorium. All lending institutions, like banks and Non-Banking Financial Companies (NBFCs) had to provide the moratorium to their borrowers. The moratorium was for a period of three months, from March 1 to May 31. The central bank, however, again extended the moratorium, in the month of May, for another three months. Now the moratorium is valid till August 31, 2020. A key aspect of this moratorium was that customers opting to avail the moratorium would not be affected in any way – neither their CIBIL score be negatively impacted, nor would they have to pay penal charges.

What is CIBIL score?

Credit information company, TransUnion Credit Information Bureau of India Limited (CIBIL), prepares a 3 digit score – based on your repayment history and other credit variables – known as CIBIL score. Your CIBIL score reflects your creditworthiness, and is of primary consideration by lending institutions before issuing any type of loan. Also known as Credit Information Report (CIR), this report encompasses the details regarding loans availed and repayments made. The report, however, does not provide details of your investments and savings. Variables such as repayment history, loan applications, types of loans availed and write-offs affect your CIBIL score. While a score between 350 and 549 is considered poor, a score in the range of 750-900 is deemed as excellent. You must remember that with a higher CIBIL, you can avail loans at attractive rates of interest.

Transunion CIBIL Statement Regarding the Central Bank’s Moratorium:

Shortly after RBI issued a directive about providing moratorium to all lending institutions, the credit information company said that it would follow the RBI guidelines. It assured that opting for the moratorium will not adversely impact the credit score of customers. It said that the company would work in close quarters with all banks and credit institutions to devise a new way to report the data on credit histories of customers during the entire period of the moratorium. The company, which sends the credit data of customers to lending institutions, said that reporting of data would be redefined. The reporting would be based on recurrent, real-time data to protect the interest of borrowers, and to ensure that none of the borrowers are negatively impacted, the company said.

The largest credit information company in the country also said that it would adopt a two pronged approach:

  • The company would monitor and report daily about the new trends in consumer behaviour. While this would protect the interest of consumers, the lending institutions would also receive the key insights to reframe and adjust their future borrowing policy.

  • While the changed approach would provide confidence to lending institutions in all future transactions, the borrowers would be safely represented in the market.

RBI’s Circular on Providing the Moratorium

In its circular, the central bank provided detailed instructions about the moratorium on outstanding term loans. It said that all commercial banks such as Regional Rural Banks (RRBs), local area banks, co-operative banks and local area banks along with Non-Banking Finance Companies (NBFCs), like microfinance institutions and housing finance companies had to provide the moratorium. Later, the RBI clarified that the moratorium also included credit card payments. All-India financial institutions were also within the ambit of the moratorium. While the central bank directed these lending institutions and finance companies to reschedule the repayment of term loans, it clarified that interest payments on the outstanding loans would continue to accrue.

What does the Moratorium mean for customers who have availed term loans?

The reason for the moratorium was to protect the interest of borrowers, many of whom are facing a liquidity crunch. If you are a customer with an outstanding term loan or credit card dues, you can approach your bank/ NBFC for rescheduling the EMIs. Your Credit Score will not be impacted because of availing the moratorium.

How to check CIBIL score now?

If despite the moratorium, you are worried about your CIBIL score, then fret not for you can easily check CIBIL score on the official CIBIL website. You are just required to visit the official website, provide the required details, and complete the verification process. Once the process is complete, you will receive your detailed financial health report comprising your credit score. 


Thus, credit information company TransUnion CIBIL has affirmed that RBI’s guidelines on the moratorium would be followed, and borrowers’ CIBIL score won’t be affected. With this assurance, businesses facing a liquidity crunch can avail the moratorium without worrying about it negatively impacting their credit score.

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