In its latest round of additional FAQs on the "interest on interest" to be returned to borrowers by banks and other lending institutions, the finance ministry has clarified that "consumptions loans, including those backed by gold as collateral, are eligible under the scheme."
The ministry also clarified that micro-loans guaranteed by Joint Liability Group (JLG) from the eight eligible categories of borrowers will be eligible for the scheme.
Earlier, on Tuesday, the finance ministry issued additional FAQs that said that commercial vehicle automobile loans of individuals are covered under the scheme.
In October, based on the Supreme Court's orders, the government had asked financial institutions to make ex-gratia payment of the difference between compound interest and simple interest for six-month moratorium period (1 March to 31 August 2020) to borrowers in specified loan accounts.
The eight categories of loans eligible under the scheme are MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal loans to professionals and consumption loans. Among these, only those having sanctioned limits and outstanding amount not exceeding Rs 2 crore as on 29 February 2020 are eligible.
Further, the loan should be "standard" as on 29 February 2020 and not classified as a non-performing asset (NPA) as on the date. A loan, under normal circumstances, is classified as a non-performing asset (NPA) by a bank (or other lenders), when a borrower fails to repay dues for over 90 days after the due date.