Coronavirus Impact: Centre Mulls Rewards For Timely EMI Payers As Relief Measure

The compound interest exemption during the moratorium period will be available to both the borrowers who availed of the six-month moratorium and those who continued paying their EMIs even during the six-month period.

(PTI)

It is likely that the government will offer rewards to those who have maintained their EMIs during the tough period by waiving compound interest (on EMIs) of loans valued at up to Rs 2 crore. As per the report in the national daily Hindustan Times, the Centre is likely to make a formal announcement regarding this before Diwali. Also Read: EXPLAINED | Aviation Industry Flies Past Covid Turbulence, But Airlines Continue To Collapse Apart from this, the government is also working on the plan to waive interest on interest during the moratorium period between March 1 and August 31. On March 27, the Reserve Bank of India (RBI) had offered a three-month moratorium on term loans from March 1 to unburden the borrowers facing economic stress due to coronavirus pandemic. The central bank then on May 22 extended the (moratorium) period by another three months until August 31, 2020. As per the report, the compound interest exemption during the moratorium period will be equally available to borrowers who availed of the six-month moratorium and those who continued paying [their EMIs] even during the six-month period. The central bank has permitted the lenders a one-time restructuring of loans without classifying them as non-performing assets to help companies and individuals manage the financial strain. In this case, those companies and individuals who have defaulted in loans for not more than 30 days as of 1 March 2020, are eligible for one-time restructuring. For corporate borrowers, banks can invoke a resolution plan until 31 December 2020 and implement it until 30 June 2021. For personal loans, banks may invoke the resolution plan till December 31, 2020, and implement it within 90 days from the date of invocation. Accounts that are standard, but not in default for more than 30 days as of March 1, 2020 will be eligible for restructuring. Meanwhile, in the much-awaited verdict of the Supreme Court, the Centre has been told to implement "as soon as possible" interest waiver on loans of up to ₹2 crores under the RBI moratorium scheme in view of the, saying the common man's Diwali is in the government's hands.