Moratorium interest-on-interest loan waiver: These loans not part of ex-gratia relief scheme
Moratorium interest-on-interest loan waiver: Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified.
Moratorium interest-on-interest loan waiver: Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified.
Issuing additional frequently asked questions (FAQs) on the 'scheme for grant of ex-gratia payment of difference between compound interest and simple interest', it said credit card dues outstanding as on February 29 would be considered for giving relief to the borrowers.
The benchmark rate applicable for such relief would be the contract rate, which is used by the credit card issuers for the purpose of EMI loans, it added.
Crop and tractor loans come under agriculture and allied activities loans and are not part of the eight segments or classes eligible under the scheme, it added.
The relief shall cover the following segments -- MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal loans to professionals and consumption loans, according to the FAQs released by the ministry earlier on Wednesday.
The Reserve Bank had on Tuesday asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs 2 crore for the six-month moratorium period is implemented by November 5, as decided by the government.
Last Friday, 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.
Loan accounts with sanctioned limits and outstanding not exceeding Rs 2 crore (aggregate of all facilities with all the lending institutions) will be eligible and such accounts should be standard in the books of the lending institutions as on cut off date of February 29, 2020.
The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said.
The ex-gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said.
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 scheme, which was announced as per the direction of the Supreme Court, is likely to cost the exchequer Rs 6,500 crore.
The story has been taken from a news agency
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
12:45 PM IST