In a major relief to many a borrower ahead of the festive season, the Union Ministry of Finance on Friday, 23 October, said it would waive the interest on interest for loans going upto Rs 2 crore – irrespective of whether the borrower had availed of the six-month moratorium that was declared in view of the COVID-19 pandemic, reports news agency PTI.
The scheme, which is likely to cost the government Rs 6,500 crore, was announced by the Finance Ministry’s Department of Financial Services, following a Supreme Court order that had asked the Centre to implement the interest waiver scheme.
According to new guidelines announced by the department, those who have taken MSME, Education, Housing, Consumer Durable, Automobile, Personal and Consumption loans can avail of this scheme which will cover the interest period from 1 March to 31 August 2020.
This also applies to credit card dues.
"“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.” " - Guidelines Issued by the Ministry of FinanceDetailed Guidelines
The loan should not be a Non-Performing Asset as of 29 February, 2020.
Lending institution can be a banking company, a public sector bank, or a co-operative bank, or a regional rural bank, or an all India financial institution or a non-banking financial company, or a housing finance company registered with the RBI or National Housing Bank.
A non-banking financial company should be a member of a self-regulatory organization recognised by the RBI
“The lending institutions 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 report said.
(With inputs from PTI)
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