On late Friday night, the government announced waiver of interest on interest for loans up to Rs 2 crore irrespective of whether moratorium was availed or not, the Indian Express reported.
In a respite for borrowers before the upcoming festive season, the government on late Friday night announced waiver of interest on interest for loans up to Rs 2 crore irrespective of whether moratorium was availed or not, the Indian Express reported.
In the backdrop of the marathon hearing in the top court and the Supreme Court’s direction to implement the interest waiver scheme, the Department of Financial Services came out with operational guidelines. The waiver is likely to cost the exchequer Rs 6,500 crore.
On October 14, the apex court had 4 directed the Centre to implement “as soon as possible” interest waiver on loans of up to Rs 2 crore under the RBI moratorium scheme introduced in the view of Covid-19 pandemic. The court had said the common man’s Diwali was in “government’s hands”.
The scheme, as per the guidelines, can be availed by borrowers in specified loan accounts for a period from March 1 to August 31, 2020.
“Borrowers who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs 2 crore (aggregate of all facilities with lending institutions) as on February 29 shall be eligible for the scheme,” it said.
The accounts should be standard as on February 29 which means that it should not be Non-Performing Asset (NPA), as per the eligibility criteria mentioned in the guidelines.
Housing loan, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans have been covered under the scheme.
The lending institutions, according to the scheme, shall credit the difference between compound interest and simple interest with regard to the eligible borrowers in respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27, 2020.
The scheme will apply for even those who have not availed the moratorium scheme and continued with the repayment of loans.
After crediting the amount, the lending institutions will claim the reimbursement from the central government.