Resident’s body demands waiver of home loan interest for lockdown period

For providing relief to homebuyers, Noida Estates Flat Owners Main Association (NEFOMA) has suggested waiver of interest amount during the moratorium period on EMIs

For providing relief to homebuyers, Noida Estates Flat Owners Main Association (NEFOMA) has suggested waiver of interest amount during the moratorium period on EMIs payable to banks and other financial institutions .

HT Image

“In the Covid-19 crisis, people are experiencing salary cuts or losing jobs, hence they are not in a position to give regular EMIs with hefty interest. Association has written to prime minister demanding waiver of interest for the lockdown period,” Anu Khan, president, NEFOMA, said on Wednesday. “The association has also sought amendment in section 24(b) of the Income Tax Act, 1961, removing the 5 years limitation in claiming deductions on interest on home loans.”

“Presently RBI’s repo rate is 4 percent however banks charge 7.35 to 9.25 percent on home loans, which means spread charge is 3.35 to 5.25 percentage points, and processing fee extra,” said Khan. “Apart from that banks pays depositors between 2.75 to 4 percent as interest on seven days to 3 years in fixed deposit. In 2019, there is a sharp reduction in FD returns to depositors. But there is no reduction to the lending rates both on the retail side and as well as in construction line.”

One of the Gaursons Realtak project allottee Jagbir Singh Bisht said, “Banks were earlier directed not to demand instalments for three months. But I deposited the EMIs because on delayed payment I have to pay interest even on three months interest. The waiver demand is justified and will provide much needed relief to us.”

Rajinder Sharma allottee of Supertech project echoed similar views and said, “The central government should take decision of waiver to provide relief to us.”

However Pankaj Gupta allottee of ATS Allure has different viewpoint and said, “Waiver demand is not justified. If banks are forced to waive the interest then banks will demand that banks should be allowed not to pay interest during lockdown period to FD and other depositors. “

Gupta said, “Best practical solution is that allottees should get the three months interest added to their loan. This will increase one or two instalments. This will help in overcoming the present financial crisis of allottees.”

Gautam Budh Nagar lead district bank manager Ved Ratna said, “Waiver is not practical approach.” He said RBI has already refused this demand. Some persons had moved Supreme Court and now the matter lies with the Union government.