Moratorium Interest Waiver: Agriculture, Tractor Loans Not Included In Relief Scheme

On Thursday, the Finance Ministry clarified that the interest-on-interest waiver on loans announced by the government last week, for the 6-month moratorium period, does not include agriculture and allied activity loans.

Issuing additional FAQs (Frequently Asked Questions) on the 'scheme for grant of ex gratia payment of the difference between compound interest and simple interest', the ministry said credit card dues outstanding as on 29 February would be considered for giving relief to the borrowers.

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The benchmark rate applicable for such relief would be the contract rate, which is used by the credit card issuers for the purpose of EMI loans, it added.

Crop and tractor loans come under agriculture and allied activities loans and are not part of the eight segments or classes eligible under the scheme, it added.

The FAQs released on Wednesday specified that the relief shall cover only MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal loans to professionals and consumption loans, with sanctioned limits and outstanding not exceeding Rs 2 crore as on 29 February 2020.

On Tuesday, the Reserve Bank of India had asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs 2 crore for the six-month moratorium period is implemented by 5 November, as decided by the government.

Last Friday, the government had announced the scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts.