diff --git a/NEWS b/NEWS
index b529deaf6d98..e21d9ece60a0 100644
--- a/NEWS
+++ b/NEWS
@@ -13,6 +13,12 @@ Any uppercase BUG_* names are modernish shell bug IDs.
 - When a background job on an interactive shell received SIGINT or SIGPIPE, the
   job termination message was empty. It now shows "Interrupt" or "Broken Pipe".
 
+- The -m (-o monitor) option is no longer ignored when specified on the shell
+  invocation command line.
+
+- A script that is interrupted with Ctrl+C now terminates its background jobs
+  as expected, unless the -m (-o monitor) option was turned on.
+
 2020-09-14:
 
 - Corrected rounding of floating point values by ksh's printf %f formatting
diff --git a/src/cmd/ksh93/edit/edit.c b/src/cmd/ksh93/edit/edit.c
index c800f06d6eaf..0f23b3103570 100644
--- a/src/cmd/ksh93/edit/edit.c
+++ b/src/cmd/ksh93/edit/edit.c
@@ -1056,7 +1056,7 @@ int ed_getchar(register Edit_t *ep,int mode)
 		{
 			if(mode<=0 && -c == ep->e_intr)
 			{
-				sh_fault(SIGINT);
+				killpg(getpgrp(),SIGINT);
 				siglongjmp(ep->e_env, UINTR);
 			}
 			if(mode<=0 && ep->sh->st.trap[SH_KEYTRAP])
diff --git a/src/cmd/ksh93/sh/jobs.c b/src/cmd/ksh93/sh/jobs.c
index ecbbb4c5567d..60a40f30781f 100644
--- a/src/cmd/ksh93/sh/jobs.c
+++ b/src/cmd/ksh93/sh/jobs.c
@@ -440,7 +440,7 @@ int job_reap(register int sig)
 		{
 			px = job_byjid((int)pw->p_job);
 			for(; px && (px->p_flag&P_DONE); px=px->p_nxtproc);
-			if(!px)
+			if(!px && sh_isoption(SH_INTERACTIVE))
 				tcsetpgrp(JOBTTY,job.mypid);
 		}
 #ifndef SHOPT_BGX
@@ -739,7 +739,7 @@ static void job_reset(register struct process *pw)
 	/* save the terminal state for current job */
 #ifdef SIGTSTP
 	job_fgrp(pw,tcgetpgrp(job.fd));
-	if(tcsetpgrp(job.fd,job.mypid) !=0)
+	if(sh_isoption(SH_INTERACTIVE) && tcsetpgrp(job.fd,job.mypid) !=0)
 		return;
 #endif	/* SIGTSTP */
 	/* force the following tty_get() to do a tcgetattr() unless fg */
diff --git a/src/cmd/ksh93/sh/main.c b/src/cmd/ksh93/sh/main.c
index 8b7782573f94..e1849a701f02 100644
--- a/src/cmd/ksh93/sh/main.c
+++ b/src/cmd/ksh93/sh/main.c
@@ -401,10 +401,10 @@ static void	exfile(register Shell_t *shp, register Sfio_t *iop,register int fno)
 		{
 			buff.mode = SH_JMPEXIT;
 			sh_onoption(SH_TRACKALL);
-			sh_offoption(SH_MONITOR);
 		}
 		sh_offstate(SH_INTERACTIVE);
-		sh_offstate(SH_MONITOR);
+		if(sh_isoption(SH_MONITOR))
+			sh_onstate(SH_MONITOR);
 		sh_offstate(SH_HISTORY);
 		sh_offoption(SH_HISTORY);
 	}
diff --git a/src/cmd/ksh93/sh/xec.c b/src/cmd/ksh93/sh/xec.c
index 81a35020e202..b44f68817fc9 100644
--- a/src/cmd/ksh93/sh/xec.c
+++ b/src/cmd/ksh93/sh/xec.c
@@ -1971,7 +1971,7 @@ int sh_exec(register const Shnode_t *t, int flags)
 			}
 			shp->exitval = n;
 #ifdef SIGTSTP
-			if(!pipejob && sh_isstate(SH_MONITOR))
+			if(!pipejob && sh_isstate(SH_MONITOR) && sh_isoption(SH_INTERACTIVE))
 				tcsetpgrp(JOBTTY,shp->gd->pid);
 #endif /*SIGTSTP */
 			job.curpgid = savepgid;
diff --git a/src/cmd/ksh93/tests/options.sh b/src/cmd/ksh93/tests/options.sh
index b6344a8eb4bd..1e5dcf3bc76c 100755
--- a/src/cmd/ksh93/tests/options.sh
+++ b/src/cmd/ksh93/tests/options.sh
@@ -541,5 +541,10 @@ print $'alias print=:\nprint foobar' > dotfile
 	[[ $opt1 == "$opt2" ]]
 ) || err_exit '-o posix option affects $- expansion'
 
+# ======
+# ksh 93u+ did not honor 'monitor' option on command line (rhbz#960034)
+"$SHELL" -m -c '[[ -o monitor ]]' || err_exit 'option -m on command line does not work'
+"$SHELL" -o monitor -c '[[ -o monitor ]]' || err_exit 'option -o monitor on command line does not work'
+
 # ======
 exit $((Errors<125?Errors:125))