Loan Moratorium Latest News: As per the directive from the RBI, the banks now have started refunding eligible borrowers for the ‘interest on interest’ or compound interest charged during the loan moratorium period.
The Central government earlier had asked the banks and NBFCs to refund the difference between simple and compound interest to eligible borrowers on or before November 5. Hence, the banks are expected to credit the refund to eligible borrowers by the end of the day.
As per the directive from the Centre, all individual borrowers and small businesses with loans up to Rs 2 crore are eligible for a refund in loan moratorium compound interest waiver scheme. Notably, the borrowers who had not opted for the moratorium are also eligible for the refund if they meet all the eligibility criteria.
At a time when the loan moratorium matter is still pending in the Supreme Court, the Centre had recently passed a scheme to “grant ex-gratia payment of the difference between compound and simple interest to borrowers of specified loan accounts” from March 1 to August 31.
Hence, how in this case, the customers will know if they have been refunded or have received the refund? As per the directive from the RBI, the banks are expected to send a text message to the borrowers concerned on his/her mobile number that is registered with the bank.
In the text message, banks are supposed to share the exact amount of refund or cashback given to the eligible borrowers. As per latest updates, some of the banks have already started refunding eligible borrowers under the scheme from November 3.
Notably, the Centre’s loan moratorium scheme is applicable to housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans.