There has been a lot of brain-storming behind the concessions of various schemes. While the RBI has helped the borrowers with their businesses, they have been ignoring the lender’s side to some extent as well. There was quite a debate on the compound interest waive off, and now that it has been decided, we have everything you need to know about it.
The wavier of interest on compound loans were directed by the Supreme Court on 14th October with immediate effect. The scheme offers a wavier of interest on interests to the borrowers. This is applicable irrespective of the moratorium taken by the borrowers. The scheme applies to the loans taken up to 2 crores.
Thus, the common man is quite happy as a huge chunk of the money was evaporating to pay off the interests of interests. The scheme shall be presented in the name of ex-gratia payments. The tenure starts from the 1st March to August and the difference between the compound interests and simple interests is taken into consideration.
This relief will reach out to the supposed-people through various financial institutions. The private lenders, NBFCs, small and micro finances, National banks for Agriculture and Rural Development, housing financers.
The government wants the people to avail of the scheme as soon as possible and that is why the decisions are made speedily. That is because the government wants the people to have a better festive season even in the pandemic.
The criteria for the loan are easy, the browser amount has to exceed over Rs 2 crores as in the month of February 29th in 2020. To name a few segments amongst the array are, MSME loans, personal loans, automobile loans, consumer durable loans, housing loans, education loans etc.