Big News Interest on Interest to be Waived On Loan up to 2 crores, Govt gives Affidavit in SC

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Loan Moratorium Latest News: Banks will not collect charges on loan moratorium. The Central Government has given this information to the SC. The Central Government has filed an affidavit in the Supreme Court that the compound interest applicable to MSME, Education, Home, Consumer, and Auto loans will be waived.

The central government has announced a big relief to the borrowers. The Government of India has filed an affidavit in the Supreme Court saying that waiving compound interest (interest on interest) applicable on MSME loans, education, housing, consumer, auto, credit card dues, and consumer loans According to the government, in the loan moratorium time of 6 months, interest will be waived on the loan interest of up to two crore rupees. The Center has said that in the event of a coronavirus epidemic, the government should bear the burden of interest waiver, this is the only solution. With this, the central government has said that permission will be sought from the Parliament for suitable grants.

What will be the effect on the common man with this decision- 

Lockdown was imposed in the entire country from late March to July due to Corona infection. Businesses were closed due to the lockdown. In such a situation, many people reached the position of not paying EMI. That’s why RBI ordered not to pay EMI for 6 months.

But the biggest problem was the extra charge that the moratorium could replace. This additional charge was becoming a big burden for the customers taking loans.

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This relief given by the central government means that people who are taking benefit of loan moratorium will no longer have to pay extra money on interest. Such customers will pay only the normal interest of the loan.

The next hearing will be held on October 5 – Earlier in the hearing, the Supreme Court had told the Center that they should come up with some concrete plans for different areas. The court had expressed its displeasure at repeatedly postponing the case. The Supreme Court had also directed the continuation of an interim order not to declare the loan defaulters, not NPA till August 31.

Let me tell you that in the last month, the Supreme Court had made strict comments on the central government in the Moratorium case. The Supreme Court had said that by filing an affidavit in this regard, the Central Government should clarify its stand and do not protect itself by hiding behind the Reserve Bank. During the hearing, the Supreme Court had reprimanded the Central Government and said that you cannot take interest only in business. People’s problems will also have to be seen.