To further brighten the holiday spirit of borrowers, the center stated in its affidavit to the Supreme Court that the difference between compound and simple interest will be deposited into borrowers’ accounts by November 5.
The central government has submitted its detailed affidavit to the Supreme Court in relation to the credit default case, indicating that the interest relief system can be used by borrowers on certain credit accounts for a period from March 1 to 31 August 2020.
This decision was made by the Finance Department and approved by the Union Cabinet at its meeting on October 21. The center said that the interest relief regime is applicable (and can benefit from) those who have not used the moratorium regime and have continued to pay their existing loans.
The Apex Court will request the credit moratorium on November 2, requesting an instruction to waive interest
What does the affidavit of the Center say?
The affidavit filed by the center through the Treasury exempts many borrowers. The affidavit established the difference between compound interest and simple interest paid on the borrower’s account before November 5.
Who will benefit from it?
The benefit applies to those who applied for loans between March 1 and August 31, 2020. As part of the system, all credit institutions pay the difference between compound interest and simple interest to the respective accounts of eligible borrowers. loan. Period between March 1, 2020 and August 31, 2020 according to the affidavit of the Center.
Who will credit the amount?
This amount will be credited by each credit institution, regardless of whether these eligible borrowers have benefited in whole or in part from the moratorium, such as deferral of the payment of advances, as shown in the affidavit.
Understand the credit default
Following the coronavirus pandemic in the country, the Reserve Bank of India announced in March a moratorium on repayment of IMEs and credit cards owed for three months. The central bank then extended the moratorium period until August 31. Based on the eligibility criteria outlined in the guidelines, accounts must be Standard as of February 29, which means they must not be Non-performing Assets (NPA).
The program covers home loans, education loans, bad credit cards, auto loans, MSME loans, permanent consumer loans, and consumer loans.