The Government of India has given a Diwali gift to all loan borrowers. The Ministry of Finance has approved the guidelines for implementation of interest waiver on loans /grant of Ex gratia payment of the difference between the compound interest and simple interest for six months of loan up to Rs 2 crore.
The guidelines came into effect after the supreme court directed the center to implement this interest waiver on the loan of up to Rs 2 crore under the RBI Moratorium scheme in view of the covid-19 pandemic.
Additionally, the court has also directed to implement the scheme as soon as possible.
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What is the duration of the Loan interest waiver?
The loan waiver will be from 1 March 2020 to 31st August 2020 i.e. for 6 months / 184 days. If your loan is closed during the said period then the period will be considered from 1 March 2020 to the date of closure of such account.
What are the Eligibility conditions to avail of RBI Loan Interest Waiver?
- The borrowers who have loan account having sanction limit and outstanding amount of NOT exceeding Rs 2 Cr ( aggregate of all facilities with the lending institution as of February 29 shall be eligible for the scheme).
- The loan should not be a Non-Performing Asset( NPA)
- The lending institution must be either a banking company or public sector bank* (the complete list is given below).
- The ex gratia payment under this scheme shall be applicable irrespective of whether the borrower has fully availed or partially availed or not availed of the moratorium on repayment announced by RBI moratorium policy.
type of loans are eligible under RBI Loan Interest Waiver Scheme
Here is the complete list of approved loan types
- MSME loans
- Educational loans
- Housing loans
- Consumer durable loans
- Credit card dues
- Automobiles loan
- Personal loans to professionals
- Consumer loans
- Any Loan ( aggregate of all facilities with the lending institution) more than 2 crores ( sanctioned limits or outstanding amount) are not eligible for ex gratia payments under this scheme.
Approved institutions for the RBI loan waiver?
The Loan can be sanctioned from:
- All banking companies
- All India Financial Institutions( AIFIs)
- All NBFC- Micro Finance Institutions ( NBFC-MFI) that are members of an RBI recognised Self Regulatory Organisation
- Urban cooperative banks
- Non-banking financial companies ( NBFCs) registered with RBI
- All Nationalised bank
- All India Financial Institutions
- State Bank of India
- NBFC microfinance institutions that are a member of an RBI recognised self-regulatory Organisation
- all State Cooperative Banks,
- District Central cooperative banks
- Regional rural banks (NABARD)
- All Housing Finance Companies registered with National Housing Banks
When this waiver amount credited to the account?
The Interest waiver amount ( eligible applicants) will be credited to the borrower account on or before 5.11.2020
What interest rate will be applicable for this waiver?
The interest rate as of 29.2.2020 will be considered for calculation purposes. Any change in interest rate after this date will not be reckoned for calculation purposes.
