The government has taken a major decision on the interest on interest during the loan moratorium. There will be relief from interest on loan interest of up to Rs. According to rating agency ICRA, this decision will cost the government exchequer about 7000 crores.)
30-40 percent loan will benefit from government relief
ICRA Vice President Anil Gupta said that only 30-40 per cent of the total loans of banks and NBFCs (Non Banking Financial Comoanies) will get the benefit of this relief from the government. In such a situation, we estimate that the exchequer will incur a burden of Rs 5000-7000 crore. At the same time, he also said that this is not going to affect banks’ profits too much.
The lockdown came into force on 25 March
The lockdown was implemented on 25 March because of the Corona crisis. The occupation was closed due to the lockdown and many people were not in a position to repay the loan EMI. In view of this, on the orders of Reserve Bank of India (RBI), banks got 6 months’ deferment for not paying EMI. But the biggest problem was the extra charge the Moratorium replaced. This additional charge was becoming a big burden for the loan-taking customers. This relief given by the central government means that people taking advantage of loan moratorium will no longer have to pay extra money on interest. Such customers will pay only the simple interest of the loan.