Udayavni Special

RBI asks lending institutions to implement waiver of interest on interest scheme


PTI, Oct 27, 2020, 12:18 PM IST

Mumbai: The Reserve Bank on Tuesday asked all lending institutions, including non-banking financial companies, to implement the waiver of interest on interest for loans up to Rs 2 crore for the six months moratorium period beginning March 1, 2020.

On October 23, the government had announced 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.

The scheme mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions.

The government had asked the lending institutions to complete the exercise of crediting the amount in the accounts of borrowers by November 5.

“All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline,” the RBI said in a notification.

The finance ministry had issued the operational guidelines in the backdrop of the Supreme Court’s direction to implement the interest waiver scheme.

The apex court on October 14, directed the Centre to implement “as soon as possible” interest waiver on loans of up to Rs 2 crore under the RBI moratorium scheme in view of the COVID-19 pandemic saying the common man’s Diwali is in the government”s hands.

Housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans are covered under the scheme.

As per the scheme, the lending institutions shall credit the difference between compound interest and simple interest with regard to the eligible borrowers in 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 on those who have not availed the moratorium scheme and continued with the repayment of loans.

The lending institutions after crediting the amount will claim the reimbursement from the central government.

The RBI had announced a moratorium on repayment of debt for six months beginning March 1, 2020 to help businesses and individuals tide over the financial problems on account of disruption in normal business activities.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Lalu in fresh trouble as BJP MLA who ‘received his call’ lodges FIR

Pakistan fails to nab 19 most wanted LeT terrorists even 12 years after 26/11 attack

Speculation rife in Karnataka as CM convenes meeting of cabinet, MPs

Farmers’ protest: Vigil stepped up in Delhi’s bordering areas, vehicles being checked

Khattar hits out at Amarinder, tells him to stop ‘inciting’ innocent farmers

PM Modi to visit Serum Institute of India in Pune on Saturday

Militant attack in J&K, two security personnel killed



Related Articles More

Economic recovery stronger than expected, need to be watchful of demand sustainability: Das

Operations at PSU banks partially hit due to trade union strike

Centre approves amalgamation of Lakshmi Vilas Bank with DBS Bank India Ltd

Sensex plunges 695 pts on profit-booking; Nifty drops below 12,900

Fee on money transfers for US, doesn’t apply to India: Google Pay

MUST WATCH

Madhavashankara name for Mangalore airport: Shri Sugunendra Tirtha Swamiji

Centuries-old Tuluva ritual of ‘Bhoomipuje Gaddekori’ still performed at Palthadi Village in Puttur

A bike rider dies in a lorry crash : The scene of the accident was captured on CCTV

Moodbidri: Four people drowned in Shambhavi river

1348 new vented dams in K’taka’s coastal districts: J.C. Madhu Swamy

Latest Additions

Lalu in fresh trouble as BJP MLA who ‘received his call’ lodges FIR

Chinese Premier Li to Attend SCO Heads of Govt Meeting Hosted by India on November 30

Phone Call Row: RJD Chief Lalu Prasad Shifted from Hospital Director’s Bungalow to Paying Ward

India, Nepal Agree to Advance Ties as Foreign Secretary Meets Nepalese Top Leadership

Former Assam CM Tarun Gogoi Cremated With Full State Honours in Guwahati

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.