Loan Moratorium row : Central Government waived off interest on interest on loans
New Delhi: The Central Government has filed an affidavit in the Supreme Court that the compound interest applicable on MSME, Education, Home, Consumer and Auto loans will be waived. The Supreme Court postponed loan moratorium till October 5 asked Center to file affidavit by October 1. The central government requested that we are talking to the RBI in this matter and soon will come up with solution.
Apart from this, this interest will not be collected on the credit card balance also. The central government said in the affidavit that in the event of an pandemic, the government should bear the burden of interest exemption, this is the only solution.
Earlier, the banks had already started reminding their customers about the loan repayment and interest on the that as soon as the loan moratorium was over.
What does it mean
The loan moratorium was implemented after the coronavirus induced lockdown has hit the pockets of common people. It was applied to postpone the repayment of loan interest for certain period of time. On the orders of the Reserve Bank of India (RBI), the banks also got an extension of 6 months for not paying EMI. However concern of people increased after moratorium could as additional charge that is interest on interest was charged by banks on loans. Now the central government has rejected the compound interest that means people who are taking benefit of loan moratorium will no longer have to pay extra money on interest.
Earlier on September 10, the Supreme Court said that the case is being deferred again and again. The Supreme Court gave an opportunity for another two weeks and said that everyone should file their affidavit and come to court with a concrete plan in the case. The SC had implied this since the first hearing in the case. The people who cannot give their EMI, will have the option to postpone their EMI for further. While the petitioners say that people are not getting any benefit of this because those who are postponing their EMI, then they have to pay full interest for the period of this adjournment.