Finance Ministry and RBI questioned in the Court
Heeding to the Supreme Court’s remark to the government “Diwali is in your hand” the Finance Ministry has come out with an invigorating policy to help the borrowers of the nation unite in festivities with much enthusiasm.
The Ministry this Wednesday approved the guidelines for a scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months of loans up to Rs 2 crore.
The lockdown and its repercussions on the economy had been the cause of concern for most citizens of the country as the economy came to a near standstill. The RBI taking cognizance of the matter in tandem with the Finance Ministry had launched a volley of policy measures to help banks and borrowers through these difficult times. The 3-month (extended till 6 months) moratorium was also a part of these policies.
The apex court while listening to a bunch of petitions surrounding the subject had extended the moratorium by six months and when the government had come up with the said scheme to aid its borrowers the court had “welcomed the decision” and urged the government to implement the same “as soon as possible.”
Guidelines by the Finance Ministry
According to the operational guidelines as issued by the Department of Financial Services, the scheme can be availed by borrower in specified loan accounts for the 6-month period from 1st March to 31st August.
“Borrowers who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs 2 crore (aggregate of all facilities with lending institutions) as on February 29 shall be eligible for the scheme,” it said.
The scheme covers a wide array of loans like housing, education, MSME, consumer durable and consumptions loans.
Under the scheme, the lenders will credit the difference between compound interest and simple interest in regards to the eligible borrowers in the respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27, 2020.
The scheme is also applicable for those who have not availed the moratorium scheme and continued to repay their loans in the previously established manner.