New Delhi: The government has announced to give cashback to the borrowers who have paid their loan EMI on time during the moratorium implemented in the lockdown. Notification of interest waiver scheme on interest has been issued by the government. According to this notification, the central government itself will pay interest on the interest during the moratorium period. 

‘Cashback’ amount in account till 5 November

According to the notification, all banks and NBFCs will transfer these amounts to the accounts of the borrowers by November 5. This benefit will be given to those borrowers who have taken loans up to Rs 2 crore from financial institutions. The scheme will benefit 8 sectors, including home loan, education loan, MSME loan, consumer durable loan, personal loan, professional loan, auto loan and credit card dues.

Every borrower will get the benefit of cashback 

The government has said that if a borrower did not take advantage of Moratorium and paid all his installments on time, he would get cashback from the bank. Under this scheme, such borrowers will get the benefit of difference between simple and compound interest of 6 months (from 1 March to 31 August).

The interest amount will be reduced from the EMI of those who do not take Moratorium. Which will also reduce the EMI. The amount of this cashback will be available to every borrower, whether he has partially or fully taken advantage of the moratorium or has not raised it at all. 

Loan should not be NPA till February 29

In the hearing held on October 14, the Supreme Court had told the Central Government that Diwali of common people is now in the hands of the government. As per the guidelines of the Ministry, ‘All the borrowers whose loan account has no sanctioned limit or total outstanding balance till February 29, will be able to take advantage of the scheme.

The second condition is that by February 29, these accounts must be standard. Standard accounts are called accounts that are not declared NPA. Meaning if those accounts are declared NPA, then interest will not get benefit on interest.

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