Finance Ministry to pay the difference between compound and simple interest on loans up to Rs 2 crore

Finance Ministry to pay difference between compound and simple interest on loans upto Rs 2 crore

According to notification issued on October 23, the Department of Financial Services has approved the operational guidelines which can be availed by borrowers on loan accounts for the period from March 1 to August 31. 

“Borrowers who have loan accounts sanctioned limits and outstanding amount of not exceeding Rs 2 crore (aggregate of all facility with lending institutions) as on February 29, this year, shall be eligible under the scheme,” it said. 

MSME Loans, Education Loans, Housing Loans, Consumer Durable Loans, Credit Card Dues, Automobile Loans, Personal Loans to Professionals, Consumption Loans are covered under the scheme. 

“Any borrower or recipient whose combination of all facilities with lending institutions is more than Rs 2 crore (sanctioned limits or outstanding limits) will not be eligible for ex-gratia payment under the scheme,” it said. A bench comprising of Justices Ashok Bhushan, R. Subhash Reddy & M. R. Shah is hearing the petition seeking relinquishing of accruing interest throughout the six-month loan moratorium period.

The Centre in its affidavit (legal instrument) filed before the Supreme Court had agreed to waive compounded interest for loans up to Rs 2 crore during the six-month loan moratorium period. The matter is slated for the next hearing on November 2. 

Devika Paliwal
I am Devika Paliwal, student of BBA LLB (Hons.) spz. in Banking and Finance at University of Petroleum and energy Studies, Dehradun. I have gained experience by interning at various places such as Law firms, High court, RERA Court, etc. Being a law student my area of interest lies in Banking laws, Criminal laws, Corporate laws. I'm an inquisitive person and always like to brush up my skills by reading more and more. Apart from indulging in academics, I'm really fond of cooking delicacy food.