The Reserve Bank of India (RBI) has asked all lending institutions to implement the recently announced interest waiver scheme for loans up to two crore rupees. Lending institutions include banks, cooperative banks, housing finance companies and microfinance institutions. In such a situation, there is a question in the mind of many borrowers whether they will get the benefit of the interest waiver scheme of RBI. Let’s know what and how it will affect you.
Who will get the benefit
Under the interest waiver scheme, the interest on the interest on loans up to two crore rupees will be waived for six months from March 1, 2020. On October 23, the government announced a grant scheme to pay the difference between compound interest and simple interest for eligible loan accounts. That is, such borrowers, whose loan is up to Rs 2 crore, can take advantage of it. This relief will be given to all such borrowers who 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.
Till when will the
government get the benefit? All the banks have instructed all banks to deposit the difference between compound interest and simple interest till November 5, 2020.
How much benefit will be realized,
if it is understood in easy language, then it has been asked to take steps to pay an amount equal to the difference between the interest on interest and the simple interest during the deferment given on the loan for six months i.e. from March to August.
Which loans will be covered
Under this scheme, home loans, education loans, credit card dues, auto loans and loans for MSNE and loans for use will be covered. Payments will also be made to small businesses and individual borrowers with loans up to Rs 2 crore.
But this is the condition
that customers will get this facility only if the loan installment is paid till the end of February i.e. the non-performing asset (NPA) is not created till February.
Why is the benefit being given? The
Finance Ministry had issued the operational guidelines in the backdrop of the Supreme Court’s directive to implement the interest waiver scheme. The apex court had on 14 October directed the Center to implement a scheme to provide relief to the common people at the earliest in view of the Kovid-19 epidemic. Also, demand can be boosted in festivals.
This is the whole matter.
On October 14, the apex court had directed the Center to implement a scheme to provide relief to the common people soon in the wake of the Kovid-19 epidemic. In fact, many questions arose regarding the payment of EMI of Moratorium period and the interest case on interest reached the Supreme Court. The central government said in an affidavit in the Supreme Court that it is ready to waive interest on interest during the Moratorium period i.e. March to August. Also gave information about cashback. The Reserve Bank then stated in a notification that it advised all lending institutions to be guided by the provisions of the scheme and take necessary action within the stipulated timeframe. According to an estimate, about 6,500 crore rupees can be spent by the central government on this.