RBI asks lending institutions to implement waiver of interest on interest scheme

TIL Desk/Business/Mumbai/ The Reserve Bank on Tuesday asked all lending institutions, including non-banking financial companies, to implement the waiver of interest on interest for loans up to Rs 2 crore for the six months moratorium period beginning March 1, 2020.

On October 23, the government had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts.

The scheme mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions.

The government had asked the lending institutions to complete the exercise of crediting the amount in the accounts of borrowers by November 5. “All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline,” the RBI said in a notification.