During the festive season, the central government has provided great relief to the borrowers. The government has issued interest waiver guidelines on EMI during the loan moratorium period. The Central Government on Wednesday relates to the difference between compound interest and simple interest for a period of six months on loans ranging from March 1, 2020 to August 31, 2020, to the borrower as a grace amount. Guidelines have been approved. This means that the Central Government has approved the interest waiver guidelines on interest on loans.
This benefit will be obtained through the lending institutions, as per the eligibility criteria. Loans under this scheme include loans, home loans, education loans, credit card dues, auto loans, consumer goods loans, personal loans and consumption loans for MSMEs up to two crore rupees.
Loans for MSME, education, housing, consumer durables, credit card dues, automobiles, along with personal loans and consumption loans up to Rs 2 crores eligible under the scheme. https://t.co/bFAw21wWE6— ANI (@ANI) October 24, 2020
It may be noted that the Supreme Court had given directions for early implementation of the Interest Waiver Scheme on interest on loans up to Rs 2 crore in loan moratorium implemented by the Central Government and Reserve Bank of India (RBI) in the wake of corona virus epidemic.
According to the guidelines approved by the Center, financial institutions and banks will deposit the amount of the difference between compound interest and simple interest during the moratorium period in the loan account of eligible borrowers. This will benefit those borrowers who have partially or fully taken advantage of the Moratorium scheme announced by the Reserve Bank.
After approving the guidelines, now banks and financial institutions will put money in the loan account of the concerned borrower and take payment from the central government. It is being told that due to the waiver of interest on this interest, the exchequer will incur a burden of Rs 6,500 crore.