As per a latest report, the Government of India will waive interest on interest charges for loans up to ₹ 2 crore ($273,000). The Government has taken this step on account of a finance ministry affidavit to the Supreme Court. It will be applicable on repayment moratorium during six-month moratorium because of the pandemic. The report further said that it will include those who have cleared their payments for a range of loans made between the month of March and August. This waiver scheme will help small borrowers. According to the finance ministry affidavit, because of the waiver, the government will bear the burden of the money lost by banks.
As per the report, the compound interest will be sparred for loans taken out for purposes including housing, education and credit-card dues. To seek a six-month moratorium on loans, the Reserve Bank of India had given its permission to borrowers. However, banks and housing finance companies were levying charges on both the principal and the interest. This translated into the repayment period being extended by more than six months.
Amid the ongoing pandemic, every sector has been going through serious employment issues. Considering this, it was getting almost impossible for people to pay their dues on time. Taking this into consideration, it became necessary for the government to come for the rescue of its people. The move has been welcomed by a lot of people. In the meantime, the coronavirus tally in India has crossed the mark of one lakh.