New Delhi: As a festival gift to the borrowers, the Ministry of Finance has approved the guidelines for a scheme to grant ex-gratia payment of the difference between compound interest and simple interest for six months of loans up to Rs 2 crore.
The guidelines came after the Supreme Court directed the Centre to implement interest waiver on loans of up to Rs. 2 crores under the RBI moratorium scheme 'as soon as possible,' keeping in mind the COVID-19 pandemic.
According to the operational guidelines of the scheme, it can be availed by the borrowers in specified loan accounts for the period from March 1 to August 31, 2020.
The guidelines said, "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." The loans covered under this scheme are MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, and consumption loans.
The scheme says that the lending institutions will 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. After crediting the amount, the lending institutions will have to claim for the reimbursement from the central government.
This scheme applies to the ones who have not availed the moratorium scheme earlier and continued to repay their loans. The government have to shell out Rs 6,500 crore for the implementation of this scheme, said a few sources.