Diwali calls for discounts and offers, but this Diwali, the borrowers sure have something to celebrate. The RBI has waived interests on a few categories of loans. The loan borrowers fall into the category of housing, education, and many more categories. The interest on interest concept has exhausted the borrowers to the point that they barely survive. Hence, the RBI has now taken the initiative to do so.
The Supreme Court on the 14th of October had ordered the RBI to wave off some interests. The pandemic had ensured the moratorium scheme to be at the upfront, but due to it, the borrowers are facing interest over interests.
Thus the compound charges on the loans up to 2 crores in the moratorium period of six-month is to be laid off by the officials. This policy is still in completion and has to be presented to the Supreme court for approval. Once the approval takes place, the borrowers shall be informed about the same.
This policy shall be in favour of those who have taken loans up to 2 crores. If they have taken them before the 29th of February, for housing, education, personal, automobiles, and several other categories. The Committee of Economic Affairs (CECA) has passed the ex-gratia scheme and has confirmed its decision on waiving off the interest on interest.
The scheme can help an array of borrowers to clear off quite a chunk of loans. In fact, the RBI has asked to clear off cashback with immediate effect. The next hearing of the government in reference to this issue is on the 2nd of November of this year. The proposals, for now, cover eight categories than the entire plethora of loans. The government is going to pass its verdict soon and hopefully, this shall make the country’s Diwali quite better than the rest of the year.