Central government Decision on waiving compound interest on loans for Moratorium period : Central government of India took a decision for the relief of loan repayors, who used Moratorium in the lockdown period I.e March to August 2020. Government agreed for waiving the interest on interest on the loans for the period of Moratorium and said the same thing to the supreme Court in an Affidavit.
What the affidavit states
The affidavit states that the people who have utilized the Moratorium and not paid EMI’ in that period will not be charged compound interest for non repayments. This will be applicable for up to RS.2 crores of loan amount. The exemption will be applicable for MSME, Education, Auto, personal, professional loans and credit card dues.
What is Moratorium Case
Petitioners filed a case on Moratorium imposed by government. They said this Moratorium is just postponing the EMI’s for the period of 6 months. In addition to this those who utilized the Moratorium and remained for not paying EMI will be charged interest on interest for not repayment in those months. This will be a big burden for the loan payers. And the petitioners questioned how this Moratorium benefits the common people?
Government denied to waive off the Interest on interest for the Moratorium period, further government said that if the interests are waived off there will be a big burden on banking sector which is the back bone of nation.
Supreme Court appeal to Government on Moratorium Case
In the last trial on this case which was took place on September 28,after hearing the government arguments, postponed the case to October 5 and asked the government to come to the court on Moratorium with complete plan. So government filed an affidavit in the court to waive off the compound interest On MSME, home, Auto, professional, personal loans and credit card dues for Moratorium period.
In affidavit government states that they come forward to bear interest burden and take permission of the parliament to take grants for that.
Loan repayors expressed their elation
The decision taken by the government to waive off the compound interest on loans for Moratorium period is a big good news for the loan repayors which gives a big relief for the common people who are facing financial crisis in this covid19 pandemic situation.
