On March 27, the Reserve Bank of India (RBI) said that all lending institutions, including banks and housing finance companies, will have to give its borrowers a three-month moratorium on term loans, the deferred instalments under the moratorium will include the following payments falling due from March 1, 2020 to May 31, 2020: (i) principal and/or interest components; (ii) bullet repayments; (iii) equated monthly instalments (EMIs); (iv) credit card dues. There was merry all around and Aam Admi was obviously happy given the loss of earnings, pay cuts and delays in salary payments. But now there is clarity. The facility, which has been dubbed as a saviour of the middle class by some analysts, is actually a punishment. When a loanee avails the deferment of EMIs for months (March to May 2020) that amount will get added to the total principal amount and the interest on loan will increase. Which means, missing two instalments could extend your loan by 6-10 months, or increase the EMI amount by 1.5%. The borrower have given two options by the lender: Option I: Add the interest to the outstanding loan and increase EMI for remaining months Option II: Keep the EMI unchanged but extend the loan tenure. The number of additional EMIs will depend on the age of the loan. In a nutshell, the advantage of EMI deferment scheme is a myth. The reality is pain for customers, gain for banks and fame for the government. There is a need to correct this urgently either by interest subvention to reduce burden on loan customers or limiting interest payment only to the three EMI amount for a specific period.