Are you one of the borrowers who chose to repay the loan EMIs during the foreclosure period? Well, you can get some benefits for doing that.
The difference between compound interest and simple interest will be deposited in the borrowers’ account by November 5, the federal government said in a statement to the Supreme Court. The federal government has filed a detailed affidavit in the Supreme Court regarding the debt ban. The lawsuit alleges that borrowers were able to obtain an interest rebate plan on specific credit accounts for a 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 on November 2 the petitions seeking a stay on the interest waiver.
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 borrowers’ account by November 5.
This benefit applies to borrowers from March 1 to August 31, 2020. Under the scheme, all lending institutions are required to 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, according to the Centre’s affidavit.
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.
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 eligibility criteria 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. The scheme is also applicable to those who have not availed the deferral scheme and continue to repay the loans.