The Reserve Bank of India (RBI) had given them a loan moratorium facility for six months, keeping in mind the facilities of the customers at the time of the corona virus epidemic. During this time those who were financially unable to pay EMI took advantage of it. At the same time, many people have paid regular installments even during the Moratorium period. If you too have paid installments during this time, then this news can prove to be important for you. The central government has approved the interest waiver guidelines on loan interest.
They will get benefits
All the borrowers, whose total debt as on 29 February 2020 did not exceed Rs 2 crore, will be eligible to avail the scheme. That is, all the borrowers will get this relief, whether they have taken advantage of the six-month exemption from the installment payment, or not. Customers who did not avail of the Moratorium will also get cashback from the bank. The scheme will cover housing loans, education loans, credit card dues, auto loans and loans taken for MSME and loans for consumption. This payment will be made to small businesses and individual borrowers with loans up to two crore rupees.
How will the payment be calculated?
Under this scheme, the borrowers will get the benefit of difference in simple loan interest of six months. Lenders include banks, co-operative banks, housing finance companies and microfinance institutions. Understand in simple terms, the amount equal to the difference between the cumulative interest i.e. ‘interest on interest’ and simple interest during the deferment granted for six months on the loan. The government will pay
On Friday, the Finance Ministry had told all RBI-regulated lenders that, if a borrower did not avail the moratorium and paid the installment on time, they would get cashback from the bank.
What is the matter?
The Central Government on Friday gave full information about its decision on the interest on interest, in which cashback was also said. Indeed, many questions have arisen regarding the payment of EMI of the Moratorium period. Interest case on interest reached in Supreme Court. The central government said in an affidavit in the Supreme Court that it has agreed to waive interest on the interest during the moratorium period (March to August). Sources in the government had estimated the cost of waiver of interest at around Rs 6,500 crore.
The apex court had on 14 October directed the Center to take an early decision on waiving interest on loans up to Rs 2 crore under the scheme of exemption from payment of installments of the Reserve Bank in the wake of the Covid-19 epidemic.