Saturday, November 28, 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

Mumbai Mayor calls Kangana Ranaut ‘naughty’, ‘two Rupees people’ after Bombay HC slammed BMC for demolishing Ranaut’s house

Bombay HC had quashed demolition notice sent by BMC to Kangana Ranaut and ordered to appoint a valuer to determine compensation

‘Such conduct does not befit a parliamentarian’, Bombay HC tears into Shiv Sena MP Sanjay Raut for his despicable remarks against Kangana Ranaut

"Sanjay Raut, without being bothered that the rule of law should always prevail, was determined to teach a lesson to Kangana Ranaut": Bombay HC

From the mass suicide in Jodhpur to the effect of rules of CAA not being notified: The Left propaganda against CAA continues

11 Bheel refugees from Pakistan committed mass suicide, that, coupled with CAA rules, has turned into a propaganda flashpoint

Is the central govt recruiting Rohingya Muslims who have illegally infiltrated into India? Not really: Here are the facts

Earlier today, a concerning message went viral on social media claiming that RAW was recruiting Rohingya Muslims

‘Indira thok di…Modi ki chhati mein’, ‘Imran Khan dost’: Congress plays a dangerous game as ‘farmer’ protest turns into show of strength for Khalistanis

Farmer protest along Punjab-Haryana border have seen participation from Khalistanis, even as Congress lends support to them

‘Malafide intent’, ‘action to target her for statements’: Bombay HC slams BMC for demolishing Kangana Ranaut’s house, appoints valuer to ascertain damage

Bombay HC was hearing a writ petition filed by Kangana Ranaut challenging the demolition of her bungalow by the Mumbai civic body

Recently Popular

Odisha: Largest ever vigilance raid in state unearths massive wealth gathered by IFS officer, fancy cars, ultra-luxurious lifestyle

Pathak's family reportedly owns a lavish apartment in Bhubaneswar with Italian marble flooring, ivory furnitures and other luxuries. The son is engaged to an MLA's daughter.

‘Indira thok di…Modi ki chhati mein’, ‘Imran Khan dost’: Congress plays a dangerous game as ‘farmer’ protest turns into show of strength for Khalistanis

Farmer protest along Punjab-Haryana border have seen participation from Khalistanis, even as Congress lends support to them

Abetment to suicide charge not established in FIR: Massive victory for Arnab Goswami as SC delivers scathing statements

A bench of Justices DY Chandrachud and Indira Banerjee stated that the FIR by Maharashtra government does not establish the charges of abetment of suicide against Arnab Goswami.

Netizens call to Boycott tax evasion accused Amrapali Jewels after it pitches Swara Bhasker as its brand ambassador

The official Twitter account of Amrapali Jewels had posted a tweet with a picture of actor Swara Bhasker endorsing its products

Mumbai Mayor calls Kangana Ranaut ‘naughty’, ‘two Rupees people’ after Bombay HC slammed BMC for demolishing Ranaut’s house

Bombay HC had quashed demolition notice sent by BMC to Kangana Ranaut and ordered to appoint a valuer to determine compensation

‘Such conduct does not befit a parliamentarian’, Bombay HC tears into Shiv Sena MP Sanjay Raut for his despicable remarks against Kangana Ranaut

"Sanjay Raut, without being bothered that the rule of law should always prevail, was determined to teach a lesson to Kangana Ranaut": Bombay HC

Delhi: Severed heads of cows found lying on the road in Ghazipur, locals allege crime committed with impunity with the help of the local...

OpIndia obtained a video in which severed heads of the cows are seen lying scattered on the streets of Ghazipur in Delhi

The UK and Russia steer away from China, emphasise on the use of domestic equipment by tech companies, 5G mobile networks

Russia has said that equipment used in the deployment of 5G network in the country would be exclusively Russian-origin.

Netizens call to Boycott tax evasion accused Amrapali Jewels after it pitches Swara Bhasker as its brand ambassador

The official Twitter account of Amrapali Jewels had posted a tweet with a picture of actor Swara Bhasker endorsing its products

BJP names Sushil Modi as its candidate in the Rajya Sabha by-election for the seat vacated due to death of Ram Vilas Paswan

Although Rajya Sabha MPs are elected for six years, Sushil Modi will remain MP only till 2024, as he will get the remaining term of the vacant seat

Haryana: Ikram tries to abduct Hindu girl, molest and assault the girl and family for refusing his advances of conversion and marriage

Ikram had allegedly insisted on getting the Hindu girl converted to Islam and thereafter marring her in his community

Mumbai Mayor calls Kangana Ranaut ‘naughty’, ‘two Rupees people’ after Bombay HC slammed BMC for demolishing Ranaut’s house

Bombay HC had quashed demolition notice sent by BMC to Kangana Ranaut and ordered to appoint a valuer to determine compensation

Shoaib Akhtar hails Pakistan as ‘greatest nation on the planet’, slams New Zealand for warning Pakistani cricketers against violating isolation protocol

New Zealand issued final warning to Pakistan Cricket team after 6 cricketers tested positive for Covid-19 & violated isolation protocol

Malegaon blasts: Bombay High Court accepts intervention plea of the victim’s family against Lt Col Purohit’s petition

Representing Lt Col Purohit, senior advocate Mukul Rohatgi stated that his client was falsely accused in the case while he was merely discharging his duty.

Murti restored a week after Hoysala-era Mahakali murti at Doddagaddavalli temple was found damaged: Read details

Week after a Mahakali murti at Doddagaddavalli Temple near Hassan district, Karnataka was found damaged, the sculptors have restored the Hoysala-era murti to its original form

PM Modi to review the progress of COVID-19 vaccine development in Ahmedabad, Hyderabad and Pune

During his three-city visit Prime Minister Narendra Modi will review the development and manufacturing of three vaccine candidates by Zydus, Bharat Biotech and Serum Institute of India respectively.

Connect with us

245,563FansLike
489,705FollowersFollow
20,200SubscribersSubscribe