This week, the Finance Ministry approved guidelines for a scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for the 6-month moratorium period, on loans up to Rs 2 crore.
These guidelines come in the light of the Supreme Court's direction to the government to implement "as soon as possible" 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.
- 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 29 February.
- These include housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans covered under the scheme.
- 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 the loan.
- 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.