New Delhi: The difference between compound interest and simple interest has been reduced to Rs. The Finance Ministry has approved the guidelines for the former Croatia repayment scheme for six-month loans of Rs 2 crore.
The guidelines come after the Supreme Court ordered the implementation of an interest rebate of up to Rs 2 crore on loans “soon” under the Reserve Bank’s injunction in view of the Govt-19 epidemic.
As per the operational guidelines issued by the Department of Financial Services, the scheme is available to borrowers in certain credit accounts from March 1 to August 31, 2020.
“As on February 29, the credit accounts were subject to permissible limits and Rs.
Home loans, education loans, credit card balances, auto loans, MSME loans, consumer durable loans and consumer loans are covered under this scheme.
Under the scheme, lenders will lend on March 27, 2020 the difference between compound interest and simple interest to eligible borrowers in their respective accounts during those periods, regardless of whether the borrower has received full or partial repayment of the loan declared by the Reserve Bank.
This scheme is applicable to those who have not received the foreclosure plan and continue to repay the loans.
Lenders will demand repayment from the Central Government after crediting this amount.
Sources said the government would have to shell out Rs 6,500 crore to implement the project.
The Supreme Court is hearing the culmination of petitions raising issues related to the 6-month loan waiver announced due to the COVID-19 epidemic.
The High Court, which heard the case on October 14, noted that the Center had taken a “welcome decision” in view of the plight of the common people, but had not issued any order in this regard.
The SC, which released the case for hearing on November 2, told lawyers appearing for the central and banks that “Diwali is in your hands”.
(With PTI inputs)