RBI notifies government's loan interest waiver scheme
Synopsis
As per the scheme, the government will pay the difference between compound interest and simple interest. The ex-gratia payment of 'interest on interest' will be applicable for six months and only for selective specified loans.
Reserve Bank of India today notified lending institutions on the central government's scheme on interest waiver during the moratorium period and asking them to take necessary action within stipulated timeline.
RBI, in a statement, issued direction to all lending institutions to implement provisions of Scheme for grant of ex-gratia payment of difference between compound & simple interest for six months to borrowers in specified loan accounts (1 March to 31 Aug) and take necessary action within stipulated time.
The Union Cabinet had last week agreed on a proposal for an ex-gratia payment of 'interest on interest' charged on loans for the six-month moratorium period announced in the wake of the COVID-19 pandemic.
As per the scheme, the government will pay the difference between compound interest and simple interest.
The ex-gratia payment of 'interest on interest' will be applicable for six months and only for selective specified loans.
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