The individual loan available in the market with a cap limit of Rs. 2 crores on the loans are eligible for the said scheme.
Considering the current scenario where the purchasing power has been hit terribly post-lockdown, the Central Government took a decision of releasing the burden of borrowers by waiving the interest on interest charged during the moratorium period.
After weeks of struggle and several discussions with the central bank, i.e. RBI and the Supreme Court it was concluded that the interest on interest will be waived for all those who opted for moratorium allowed by the government itself in the first place as a result of slowing economy.
Further relief extended by the banks, cashback for interest waiver
For all the borrowers who are paying the Equated Monthly Instalments (EMI), the financial institutions, i.e., the banks and non-banking financial companies will refund the ‘interest on interest’ charged to the customers during the period of moratorium.
If any borrowers have taken a loan from SBI, HDFC Bank, ICICI Bank or any such lending institution mentioned under Clause 3, they will receive a refund for the interest charged for the six months of the moratorium.
The Centre has intimated the Supreme Court that all the financial institutions have been directed to credit the difference of compound interest and simple interest on loans with a cap limit of Rs. 2 crores in the account of the eligible borrowers. The Finance Ministry has stated that as soon as the lending organizations credit the said amount, they can claim the amount reimbursed to the eligible borrowers from the central government.
The government has mentioned in an affidavit filed with the apex court that the ministry has launched a scheme under which the financial institutions will have to credit the amount in the eligible borrower’s account following the COVID-19 pandemic situation.