The government has said that it will implement a loan relief scheme by November 5, aimed at helping borrowers during the coronavirus pandemic, and reimburse the interest on interest applicable to eligible loan repayments due between March and August. In guidelines on the loan relief released on Wednesday, the Department of Financial Services said the relief will be available to the borrowers regardless of whether they opted to defer their EMIs, either fully or partially. The government said lending institutions will first credit the amount – the difference between compound interest and simple interest for the six-month period – on eligible loans up to ₹ 2 crore, which will be reimbursed by the government as part of the scheme.
According to operational guidelines issued by Department of Financial Services, the scheme can be availed by borrowers in specified loan accounts for a period from March 1 to August 31, 2020.
The relief on compound interest will be applicable to standard accounts on February 29, 2020, and the scheme will be implemented by November 5, according to the official notification.