New Delhi: The big question in front of borrowers who have lost their means of earning during the Corona period is how will they fill the EMI of their house, car, and the second big crisis is about the compound interest of the loan moratorium. But now the government has eased their difficulty.
No compound interest on loans up to 2 crores
If a person or company has taken a loan of up to two crore rupees, then the government will not charge interest on the loan interest, that is, the cycle of compounding interest will end. The government has given an affidavit in the Supreme Court that this 6-month loan moratorium includes from the MSME to the personal loan. That is, compounding interest will not be charged on such a loan.
The Center has said that the government will bear the burden of relaxation of interest because of the coronavirus epidemic. The government has said that permission will be taken from Parliament for suitable grants.
The government changed its stance on the panel’s suggestions
Earlier in the Supreme Court, the government had said that they could not forgive the interest on the interest, because it would affect the condition of the banks. The Supreme Court then formed a panel headed by former CAG Rajiv Maharishi to assist the borrowers. Accepting the suggestions made by this panel, the Center has changed its old position and has now decided not to take a compound interest. The next hearing on this matter will be held on 5 October in the Supreme Court.
This facility of the 6-month moratorium will be available only to those borrowers who have loans up to 2 crores, those with more loans will stay out of this scheme.
These borrowers will get a discount
MSME loans up to 2 crores
Education loans up to 2 crore
Home loans up to 2 crores
Auto loans up to 2 crores
Consumer durables loans up to 2 crores
Credit card outstanding up to 2 crore
Personal, professional loans up to 2 crore
Concession loans up to 2 crores
In the last hearing, the Supreme Court had told the Central Government that they came to the court with some concrete plan. The court had expressed its displeasure at avoiding the case repeatedly. The court also said that loans not repaid till August 31 should not be declared as NPA.
Let us tell you that due to the corona and lockdown, the RBI in March gave the borrowers the facility to postpone the moratorium ie loan EMI for 3 months. Later it was extended for 3 more months till 31 August. RBI had said that if the loan instalment is not repaid for 6 months, then it will not be considered a default. However, after the moratorium, full interest will have to be paid on the outstanding payment. The condition of interest has been moratorium customers in the Supreme Court. He argues that interest in moratorium should be exempted because it is wrong to charge interest on interest.