A moratorium, in banking parlance, is a facility under which a bank offers a temporary repayment holiday to a stressed borrower. This is to help the borrower improve his cash flows during a financial crisis. In the backdrop of Covid-19, RBI allowed banks and NBFCs to provide moratorium on all term loans to their borrowers. A moratorium doesn't necessarily mean a waiver. The borrower still needs to pay back the money to the bank after the moratorium period is over. In other words, a moratorium gives a breathing space to a stressed borrower.