EMI Moratorium: Loan interest rebate credited to borrowers by November 5

New Delhi: To further boost the festive sentiment of borrowers, the Supreme Court has said in its affidavit that the difference between compound interest and simple interest will be deposited in the borrowers’ account by November 5.

The federal government has filed its detailed affidavit in the Supreme Court in connection with a debt ban case claiming that borrowers can avail interest rebate scheme on specific credit accounts for the period from March 1 to August 31, 2020.

The decision was taken by the Finance Ministry and approved by the Union Cabinet at its meeting on October 21. For those who did not receive an interim plan, the interest rebate scheme applied (and they may receive) and continued with the repayment of existing loans.

The Supreme Court is set to hear petitions seeking an injunction on November 2 seeking a waiver of interest.

What the Centre’s affidavit says

The affidavit filed by the Central Government, through the Ministry of Finance, provides relief to a large section of the borrowers. The affidavit states the difference between compound interest and simple interest deposited in the account of the borrower by November 5th.

Who will benefit from this?

This benefit is applicable to borrowers from March 1 to August 31, 2020. Under this scheme, all lending institutions will credit the difference between compound interest and simple interest in the accounts of eligible borrowers for the period between March 1, 2020. , Until August 31, 2020, as stated in the Centre’s affidavit.

Who will credit the amount?

The affidavit states that this amount will be credited to each lender, regardless of whether such eligible borrowers have received in full or partially or have not received a foreclosure such as deferral of payment.

Understanding the Debt Moratorium

In the wake of the corona virus outbreak in the country, the Reserve Bank of India in March announced a three-month ban on repaying EMIs and credit card arrears. The central bank then extended the ban until August 31. According to the qualifications mentioned in the guidelines, the accounts must be up to standard by February 29, i.e. it must not be non-performing assets (NBAs).

Home loans, education loans, credit card balances, auto loans, MSME loans, consumer durable loans and consumer loans are covered under this scheme.

With ANI inputs

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