Loan Moratorium: Centre Gives Its Nod To Waive Compound Interest For Specific Loans Below Rs 2 Crore
The ongoing pandemic originated from the Dragon country China has left a deadly impact on India. Many industries were forced to shut after facing huge losses and crores of Indians turned unemployed.
Adding more problems to the middle class and other loan takers, the Reserve Bank of India (RBI) announced a loan moratorium on the repayment of loan EMIs, where the interest that is chargeable in the moratorium period will be added to the EMIs the loan takers have to pay.
Amid this, the center agreed in the Apex court to waive off the compound interest on the loans for the moratorium period, i.e between March and August. However, the waiving of compound interest is subjectable only for the loans below Rs 2 crore.
In its affidavit, the Centre maintained that waiving off interest on all sorts of loans will leave a heavy burden on banks and a lion share of banks' net worth will be wiped out.
The Centre filed a counter-affidavit responding to a bunch of petitions that were filed in the Supreme Court over the issues related to the moratorium period granted by the lending institutions
In its affidavit, the Union Finance Ministry maintained that compound interest for the MSME loans, educational loans, housing loans, consumer durable loans, credit card dues, auto loans under the category of Rs 2 crore will be waived.
Adding more problems to the middle class and other loan takers, the Reserve Bank of India (RBI) announced a loan moratorium on the repayment of loan EMIs, where the interest that is chargeable in the moratorium period will be added to the EMIs the loan takers have to pay.
Amid this, the center agreed in the Apex court to waive off the compound interest on the loans for the moratorium period, i.e between March and August. However, the waiving of compound interest is subjectable only for the loans below Rs 2 crore.
In its affidavit, the Centre maintained that waiving off interest on all sorts of loans will leave a heavy burden on banks and a lion share of banks' net worth will be wiped out.
The Centre filed a counter-affidavit responding to a bunch of petitions that were filed in the Supreme Court over the issues related to the moratorium period granted by the lending institutions
In its affidavit, the Union Finance Ministry maintained that compound interest for the MSME loans, educational loans, housing loans, consumer durable loans, credit card dues, auto loans under the category of Rs 2 crore will be waived.