RBI Asks Lenders To Implement Waiver Of Interest On Interest Scheme By November 5

The Reserve Bank on Tuesday asked all lending banks and non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to ₹ 2 crore for the six-month moratorium period is implemented by November 5, as decided by the government.

Last Friday, the government had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts.

The lending institutions have been asked to complete the exercise of crediting the amount in the accounts of borrowers by November 5.

Housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans are covered under the scheme.

The scheme mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions.

“All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline,” the RBI said in a notification.

In a tweet, office of Finance Minister Nirmala Sitharaman said “RBI advises all lending institutions to be guided by the provisions of the scheme for grant of ex-gratia payment of difference between compound interest & simple interest for 6 months to borrowers in specified loan accounts & take necessary action within the stipulated timeline”.