Centre announces interest waiver scheme for loans up to Rs 2 crore
MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal, professional loans and consumption loans are eligible for this scheme.Updated: Oct 24, 2020, 14:11 IST
The Centre on Friday approved the scheme for granting of ex gratia payment of the difference between compound interest and simple interest for six months of loans up to Rs 2 crore.
“The ex gratia payment under this scheme shall be admissible irrespective f whether the borrower had fully availed or partially availed or not availed of the moratorium on repayment announced by RBI on 27.03.2020 and extended on 23.5.2020,” the government order said.
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On March 27, the Reserve Bank of India (RBI) had announced a three-month moratorium on terms loans from March 1 to enable borrowers to tide over the economic fallout of the Covid-19 pandemic. On May 23, it extended the moratorium period by another three months until August 31, 2020.
The government will have to shell out Rs 6,500 crore for the implementation of the scheme.
The Supreme Court on October 14 said benefits of waivers to borrowers up to Rs 2 crore must be implemented as soon as possible. The top court, which posted the matter for hearing on November 2, told the advocates appearing for the Centre and banks that “Diwali is in your hand”.
Here’s all you need to know about the scheme
1. It will be applicable on MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal, professional loans and consumption loans.
2. Borrowers whose aggregate of all facilities with lending institutions is more than Rs 2 crore are not eligible.
3. The loan should not be a non-performing asset as on February 29, 2020.
4. The six months will be calculated from March 1, 2020 to August 31, 2020.
5. If loan accounts are closed during the said period, then it will be restricted to the date of closure from March 1.
6. The rate of interest would be as prevailing on February 29, 2020.
7. Crediting the amount should be done before 5.11.2020.
8. After the lending institutes credit the amount, they can lodge their claim for reimbursement latest by December 15, 2020.
9. Each lending institution shall put a grievance redressal mechanism for the eligible borrowers.
10. The claims submitted by banks and other lending institutions will be processed through the State Bank of India.
(With Agency Inputs)