New Delhi | Jagran News Desk: The Narendra Modi government on Friday night announced waiver of compound interest for loans up to Rs 2 crore under the Reserve Bank's moratorium scheme in view of the coronavirus pandemic. The interest on interest will be waived irrespective of whether moratorium was availed or not. The decision has come in the backdrop of the Supreme Court's direction to implement the interest waiver scheme. The decision is likely to cost the government Rs 6,500 crore.

On October 14, the Supreme Court had asked the government to implement the interest waiver on loans up to Rs 2 crore "as soon as possible" keeping in view the upcoming Diwali festival. According to the guidelines issued by the Department of Financial Services, borrowers in specified loan accounts for a period from March 1 to August 31, 2020.

"Borrowers who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs 2 crore (aggregate of all facilities with lending institutions) as on February 29 shall be eligible for the scheme," it said. As per the eligibility criteria mentioned in the guidelines, the accounts should be standard as on February 29 which means that it should not be Non-Performing Asset (NPA).

As per the government's guidelines, house loan, car loan, education loans, MSME loans and credit card dues will also be covered under the scheme.

Posted By: Shashikant Sharma