CENTRE DECIDES TO WAIVE INTEREST ON INTEREST DURING THE MORATORIUM

 



New Delhi: The central government of India has decided to waive interest on interest during the six-month moratorium on loans up to two crore rupees. The government has issued a statement that most vulnerable Indian citizens will benefit because of this waiver. Earlier, the banks had argued that interest on interest waiver during moratorium period will simply defer the interest to a future date but not completely waive the interest on the loans. Individuals and MSME’s will undoubtedly benefit from this new decision but it is predicted that the banks will lose a substantial amount of money if the interest on interest during moratorium between March and August is to be waived. Some say that the current decision by the Indian government will push banks to the brink of total collapse.

The Finance Ministry of India said in the statement that MSME loans, housing loans, educational loans, personal loans to professionals, consumption loans, credit card dues, auto loans and consumer durable loans will come under the decision. As the public might welcome the ministry’s decision, it might result in great losses for Indian banks which might render them helpless.


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