Thursday, December 3, 2020
Home News Reports Finance ministry issues guidelines for interest waiver scheme during the lockdown period- Read details

Finance ministry issues guidelines for interest waiver scheme during the lockdown period- Read details

This scheme is not linked with the EMI moratorium announced by RBI, the ex-gratia payment under the scheme will be made regardless whether the borrower had availed the moratorium facility or not.

The union finance ministry has issued the detailed guidelines for the waiver of ‘interest on interest’ for loans that was announced earlier this month. The govt had decided to waive the compound interest on loans upto Rs 2 crore for a period of six months, from March to August.

It was announced that this compound interest waiver will be applicable to all borrowers un the approved categories, regardless of whether the moratorium was availed or not, which was announced by the Reserve Bank of India for the lockdown period.

Now according to the guidelines issued by the ministry, the interest waiver will be funded by the government in the form of ex-gratia payment. According to the “Scheme for grant
of ex-gratia payment of difference between compound interest and simple interest for six
months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020)” issued by the ministry, the following categories of loans will be eligible for this interest waiver, provided that the outstanding loan amount does not exceed Rs 2 crore.

  1. MSME loans
  2. Education loans
  3. Housing loans
  4. Consumer durable loans
  5. Credit card dues
  6. Automobile loans
  7. Personal loans to professionals
  8. Omsumption loans

The terms and conditions of the scheme include:

The guidelines say that any borrower whose aggregate of all facilities with lending institutions is more than Rs. 2 crore (sanctioned limits or outstanding amount) will not be eligible for the waiver under this scheme.

The loan should not have turned into NPA (non-performing asset) as on 29th February 2020.

The loan must be availed from a banking company, a Public Sector Bank, a Co-operative Bank, a Regional Rural Bank, an All India Financial Institution, a Non-Banking Financial Company or a Housing Finance Company. Loans from Micro Finance Institutions are also eligible, provided it is a are member of a Self-Regulatory Organisation (SRO) recognised by RBI.

This scheme is not linked with the EMI moratorium announced by RBI, the ex-gratia payment under the scheme will be made regardless whether the borrower had availed the moratorium facility or not.

For this payment, the difference between compound interest and simple interest on the loan for the period from 1 March to 31 August will be calculated, and the same amount will be credited to the account of the borrowers. The rate of interest as on 29th February will be considered for this calculation.

The amount will be credited to the accounts of eligible borrowers by 5 November 2020.

The respective lending institutions will credit the difference between simple and compound interests to the accounts of eligible borrowers. After the payments are made, the lending institutions will claim reimbursement from the central government. Such claims will have to be submitted with designated officers or cells at State Bank of India. The govt has directed the SBI to assign designated officers or cells for this purpose. These cells will function as the nodal agency under the scheme.

While calculating the interest, the outstanding loan as on 29/02/2020 will be considered, and any payment after that date will be ignored. This will ensure that the scheme will be uniform for all, regardless of whether the moratorium facility was availed or not.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

Related Articles

Trending now

Petition filed in HC wants Kangana Ranaut’s Twitter account deleted, mentions that she called Uddhav Thackeray govt ‘Pappu Sena’

The petition claimed that Kangana Ranaut had disrespected judiciary by posting a tweet in which she referred to Maharashtra govt as Pappu Sena.

‘If anything happens to him, CM will be responsible’: Expelled BJD MLA picked up by Odisha officials, wife says he is now untraceable

Expelled BJD leader Pradeep Panigrahi was picked up by EOW of the Crime Branch from his residence in Odisha as wife cries foul

From supporting Khalistanis to hurting religious sentiments of Sikhs: A brief intro of the new liberal favourite, Diljit Dosanjh

Singer Diljit Dosanjh has become the new blue-eyed boy of the left-liberal gang after he supported ongoing farmers protest

ISIS Mufti: Christians given ‘option’ to pay ‘Jizya’ and be protected by the Caliphate since they are ‘followers of the book’

ISIS terrorist Shifa Ali Bashir Muhammad revealed that ISIS had given the 'option' to the Christians of Mosul to pay Jiziya.

Here are 5 fear-mongering claims about the COVID vaccine, because even Harbhajan Singh is not ‘immune’ to rumours

Debunking claims about Covid-19 vaccine is the need of the hour as celebrities and influencers have started posting misleading information.

Mamata Banerjee brags about knowing 14 languages to compete with PM Modi, then says ‘I don’t like to show-off’: Read what happened

Well, the iconic "kaa kaa chi chi" song by Mamata Banerjee does not leave an iota of doubt on how talented the WB CM is

Recently Popular

Ex-Indian cricketer Yuvraj Singh’s father Yograj Singh joins Farmer’s protests, justifies “Indira thok di” comment

Multiple videos of Yograj Singh, Yuvraj Singh's father, have gone viral on social media where he has been giving provocative speeches amid the ongoing farmer protests

Indian man proposes to his Australian girlfriend during Ind vs Aus cricket match, here is what happened next

While India's performance has been below par, netizens found happiness in the unusual proposal that became the highlight of the match.

Even pandering doesn’t get India Today a free pass: Here is why ‘liberals’ are today cancelling Rajdeep and Rahul Kanwal

'Liberals' are cancelling India Today, Rajdeep Sardesai and Rahul Kanwal over their coverage of the allegations against Shehla Rashid

Mirzapur: Three Brahmin boys found dead, family says they were murdered with eyes gouged out, police deny

The three cousins: 14-year-old Sudhanshu Tiwari, 14-year-old Shivam Tiwari and Hariom Tiwari were mysteriously found dead in a pond in the Lalganj police station area, Mirzapur.

MDH Masala owner Mahashay Dharampal Gulati passes away at 97

Mahashay Dharampal Gulati, the owner of the spices brand 'MDH' passed away on Thursday morning following a cardiac arrest.

Exposing hypocrisy of Congress, CPIM, Bharatiya Kisan Union and even Justin Trudeau over the Farm Bills 2020, point by point

The industry scale hypocrisy surrounding the protests around Farm Laws is staggering

Petition filed in HC wants Kangana Ranaut’s Twitter account deleted, mentions that she called Uddhav Thackeray govt ‘Pappu Sena’

The petition claimed that Kangana Ranaut had disrespected judiciary by posting a tweet in which she referred to Maharashtra govt as Pappu Sena.

‘If anything happens to him, CM will be responsible’: Expelled BJD MLA picked up by Odisha officials, wife says he is now untraceable

Expelled BJD leader Pradeep Panigrahi was picked up by EOW of the Crime Branch from his residence in Odisha as wife cries foul

From supporting Khalistanis to hurting religious sentiments of Sikhs: A brief intro of the new liberal favourite, Diljit Dosanjh

Singer Diljit Dosanjh has become the new blue-eyed boy of the left-liberal gang after he supported ongoing farmers protest

ISIS Mufti: Christians given ‘option’ to pay ‘Jizya’ and be protected by the Caliphate since they are ‘followers of the book’

ISIS terrorist Shifa Ali Bashir Muhammad revealed that ISIS had given the 'option' to the Christians of Mosul to pay Jiziya.

PM Modi gave me pension, my sons assaulted me: Watch video of 85-year-old woman who wants to give 12-bigha land to PM Modi

The elderly woman said that while PM Modi gave her pension, her sons physically assaulted her, hence, she wanted to give land to him

Here are 5 fear-mongering claims about the COVID vaccine, because even Harbhajan Singh is not ‘immune’ to rumours

Debunking claims about Covid-19 vaccine is the need of the hour as celebrities and influencers have started posting misleading information.

Mamata Banerjee brags about knowing 14 languages to compete with PM Modi, then says ‘I don’t like to show-off’: Read what happened

Well, the iconic "kaa kaa chi chi" song by Mamata Banerjee does not leave an iota of doubt on how talented the WB CM is

Kangana Ranaut vs Diljit Dosanjh fight turns ugly, she calls him Karan Johar’s pet dog

Days after Kangana mistook an elderly lady in Punjab farmers' protest for Bilkis Bano of Shaheen Bagh 'protests', Punjabi singer-actor Diljit Dosanjh got into a war of words with her on Twitter.

Mangaluru police arrest online food delivery agent Nazeer Mohammad for painting graffitis hailing Islamic terror

The graffiti warned 'sanghis' and 'Manuvadis' that Lashkar and Taliban will be invited to deal with them.

Swati Chaturvedi wants to sue Twitter user and send him to jail for exposing her history of manipulated media

Swati Chaturvedi wants to sue someone for pointing out she shared photoshopped image after having apologised for sharing the same photoshopped image.

Connect with us

245,563FansLike
492,575FollowersFollow
20,300SubscribersSubscribe