The Govt is planning on waiving off the compound interest (on EMIs) of loans valued at up to Rs 2 crore for timely EMI payers.
This reward announcement will be made before Diwali.
Read on to know more…
A Snippet of Backstory!
On March 27, the Reserve Bank of India (RBI) had announced a three-month moratorium on term loans from March 1 which was then extended by another three months till August 21, 2020.
Earlier this month, the government announced that it is working on waiving off the interest during the moratorium period to bring relief to the borrowers amid the COVID-19 pandemic.
Will Those Who Opted For Moratorium Get The Reward?
This benefit of waiver of compound interest is for debtors or borrowers who paid their EMIs on time during the moratorium period.
The reward may be extended to all types of loans, comprising home mortgages.
A government source told the Hindustan Times, “There should not be any sector-specific discrimination. It is not prudent to exempt interest on interest for personal loans only and deny the same for home loans. It will be extended to all those who have taken loans up to Rs 2 crore, which is a reasonable limit.”
“Compound interest exemption during the moratorium period will be equally available to all borrowers”, added the source. In other words, this will include both the parties, those who availed the moratorium period, and those who continued paying their EMIs even during the period.
It will be interesting to see how the govt will handle the financial consequences of this move.
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