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RBI asks lenders to Implement Waiver of Interest on Interest Scheme

Published on October 28, 2020
Current Context: The Reserve Bank of India (RBI) has asked lending institutions including NBFCs, to implement waiver of interest on interest for loans of up to Rs 2 crore for 6 months
RBI asks lenders to Implement Waiver of Interest on Interest Scheme
moratorium period beginning from 1st March 2020. 
  • GOI has announced the scheme for grant of ex-gratia payment of the difference between simple interest and compound interest for 6 months to borrowers in specific loan accounts. 
  • Now banks and NBFCs will be mandated to grant ex-gratia payment for certain categories of borrowers by crediting the difference between simple interest and compound Interest between 1st March 2020 to 31st August 2020.
  • The centre has asked lending institutions to complete the crediting of amount in the accounts of borrowers by 5th Nov 2020.
  • The housing loans, educational loans, credit card loans, MSME loans, consumer durable loans, auto loans and consumption loans are included under this scheme.
  • The scheme is applicable for those who have not availed the moratorium scheme and has continued with repayment of loans.
  • Under this scheme, the difference will be credited to the eligible borrowers accounts for the said period irrespective whether a borrower has fully or partially availed moratorium on loan announced by RBI initially on 27th Mar 2020. 
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das

Question: 

Q.1 RBI has asked lending institutions including NBFCs, to implement waiver of interest on interest for loans of up to Rs _____ for 6 months moratorium period beginning from 1st March 2020? 
a. Rs 2 crore
b. Rs 1.5 crore
c. Rs 2.5 crore
d. Rs 3 crore
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