Mumbai: The Reserve Bank has asked all lending institutions to implement the waiver of interest on interest for loans up to Rs two crore for the six months moratorium period beginning 1 March, 2020.
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 1 March, 2020 to 31 August, 2020 by respective lending institutions.
On 23 October, 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 government had asked the lending institutions to complete the exercise of crediting the amount in the accounts of borrowers by 5 November.
In a notification, the apex bank said, “All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline.”
The Finance Ministry had issued the operational guidelines in the backdrop of the Supreme Court’s direction to implement the interest waiver scheme.