Affidavit says that interest on interest will be waive off. But for eligible borrowers who have taken loans up to 2 crores.
The waiver will cover education loans, MSME loans, automobile loans, consumer loans, credit card loans, personal and professional loans.
So, in order to be eligible for the waiver, the account should not be a Non-Performing Asset, and it should be a standard account on 29.02.2020.
As per the affidavit, the decision got approval on 21.10.2020.
Under the terms of the scheme, the difference between simple and compound interest will be transferred
to the borrower’s account for periods between 1.03.2020 and 31.08.2020.
The credit difference will be transfer by lending institutions defined under Clause 3 of the scheme
which includes NBFCs, public sector banks, housing finance companies, regional rural banks, co-operative banks and All India Financial Institutions.
As per the scheme, lending institutions can claim reimbursement from the Central Government for the amount that is transfer to eligible borrowers.
The central government took this decision after considering the impact on the economy, economic scenario, nature of borrowers, and to provide economic relief.
Lending institutions will transfer the amount to the borrowers by 5.11.2020