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Reserve Bank asks all lending institutions to implement waiver of interest on interest scheme
Oct-27-2020

Few days after the government announcement, the Reserve Bank of India (RBI) has 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.

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