The central government has provided a great deal of relief to individual borrowers and MSME borrowers. The Government has filed an affidavit before the Supreme Court saying that interest will be waived on the MSME loan, the college, the housing user, the balance on the auto credit card, and the interest on the consumer loan.
However, this interest exemption will only be available for loans up to Rs 2 crore. In addition, citizens who have paid the outstanding loan for six months, i.e. from March to August, will also be given interest relief.
The Government has indicated that the exemption from an interest in the case of the coronary virus epidemic would carry the pressure on the banks. In addition, the Central Government has also confirmed that Parliament’s consent for this would be taken.
The Government stated in the affidavit that if the interest of the meritorious facility of all types of loans is waived, it will incur a burden of six lakh crore ropes. This will lead to a large reduction in the total net value of the banks.
Due to Corona, a lockdown was imposed in the country from the end of March to July. Both businesses have been shut down because of the lockdown. In such a condition, many citizens were unable to pay EMI, and the Reserve Bank of India issued a three-month exemption for not paying EMI, the meritorious facility.
After which the RBI extended the extension for a further three months until 31 August. That is to say, a total of six months of meritorious facilities has been issued, but the only issue with this was the added costs generated because of the moratorium facilities.
These additional charges have been a huge burden on the borrowing consumers, to whom the central government has now provided relief. This waiver from the Central Government means that citizens who are taking advantage of the Loan moratorium will not have to spend more money on interest.
These consumers can only pay interest on the loan. Several citizens have submitted a petition before the Supreme Court requesting an extension of the moratorium term and a denial of interest, which is currently being heard before the Supreme Court.
At the hearing on 28 September, the central government demanded Summon from the court to decide on amnesty of interest, but the government had claimed that it would file an affidavit within two-three days of its decision.
The case will now be heard on Monday, October 5. On the same day, the court could decide to waive interest on interest. On 30 September, the Supreme Court ruled that bank accounts that did not pay the loan could not be considered NPA until two months later.
At the judgment on 28 September, the court confirmed that it would extend the order not to disclose NPA bank accounts for two months. In other terms, banks will not be eligible to declare non-payment accounts as NPAs until November 3.