Compound Interest Waiver a Much-Needed Relief
Manoj Kotak, MP North East Mumbai & Member of Standing Committee on Finance & Standing Committee on Commerce.
To offer relief to small borrowers, the Centre has rolled out the much-awaited waiver of compound interest scheme. The relief will be paid to the borrower in the form of grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30).
This decision of the government to announce a compound interest waiver on moratorium loans will provide some much-needed relief to borrowers. The scheme will help cushion the devastating impact that the Covid-19 pandemic has had on the economy, especially for SMEs and small borrowers. The nation thanks PM Modi ji for this bold step during tough times.
The scheme not only applies to borrowers who availed the moratorium option issued by the Reserve Bank of India (RBI) to defer repayment of EMIs and other loans, but also to all others who may have loans of less than ₹2 crore.