The Finance Ministry has approved guidelines for a scheme for grant of ex-gratia payment of the difference between compound interest (CI) and simple interest (SI) for the 6-month moratorium period, on loans up to Rs.2 crore. The guidelines come taking into consideration the Supreme Court's direction to the govt to implement at the earliest, the interest waiver on loans of up to Rs 2 crore under the RBI's moratorium scheme announced in view of the COVID-19 pandemic on 27 March 2020.
As per the operational guidelines issued by Department of Financial Services, the interest waiver scheme can be availed by borrowers in specified loan accounts for a period from 1 March to 31 August 2020.The guidelines covers following points:-
Lending institutions shall credit the difference between compound interest and simple interest pertaining 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 the loan. Borrowers who have loan accounts having sanctioned limits and outstanding amount of not not byong Rs 2 crore i,e aggregate of all facilities with lending institutions - as on 29 February. These include education loans, housing loans,, auto loans, credit card dues, MSME loans, consumer durable loans and consumption loans covered under the scheme.
The scheme is applicable to those who have not availed the moratorium scheme and continued with the repayment of loans. The lending institutions after crediting the amount will claim the reimbursement from the central government. According to a PTI report citing sources, the government will have to shell out Rs 6,500 crore for the implementation of the scheme.
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