New Delhi: The Modi government has announced a major relief to borrowers. The government has filed an affidavit in the country's largest court stating that compound interest applicable to MSME loans, education, housing, consumer, auto, credit card arrears, and consumer loans will be waived.

According to the government, the 6-month loan will give interest concession on loan interest up to Two crore rupees in the moratorium period. Also, this interest will not be levied on credit card arrears. The central government said that the government should bear the burden of interest concession in case of an epidemic, which is the only solution. In an affidavit in the apex court, the finance ministry said, the government has decided to uphold the tradition of helping small borrowers.

Due to lockdown, the businesses were closed, a large number of people are not in a position to repay the loan EMI. In view of this, the RBI order six months' grace for not taking the instalment from the customers. But the biggest concern was the additional charge for the moratorium. These additional charges were becoming a big burden for customers who took the loan. The relief given by the central government means that the people who are taking advantage of the loan moratorium will no longer have to pay extra money on interest. Such customers will only give normal interest.

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