Will you get compound interest waiver on loan account sold by one bank to another? Check new FinMin FAQs

By: |
Updated: Nov 04, 2020 3:44 PM

Compound interest waiver on commercial vehicles, sold loan account by bank: Will you benefit from the interest waiver scheme

interest waiver schemeIndia's ranking on protecting minority investors slipped from 7th last year to 13th in World Bank's Doing Business 2020 report.

Compound interest waiver on commercial vehicles, sold loan account by bank: Will you benefit from the interest waiver scheme if your loan account was sold to another lender by your bank? The answer is Yes, according to a new clarification issued by the Finance Ministry. 

The Finance Ministry on Tuesday released some new FAQs to clear doubts of borrowers. It says that individual loans sold by one lending institution to another would be eligible under the Scheme. 

“Yes, accounts of the eligible category of loans are covered under the Scheme including loans accounts of individuals bought as part of pool buyouts by one lending institution from another,” the ministry said. 

Interest waiver on commercial vehicle auto loan

As per the FAQs, commercial vehicle automobile loans of individuals are covered under the scheme. “Automobile loans including for commercial vehicles, such as four-wheeler taxi, are eligible under the scheme.”

The FAQs also say that “standard” accounts from eligible categories of the borrower as on 29.2.2020 in a lending institution are covered under the Scheme. 

“Yes. Accounts of eligible category of borrowers which are standard as on 29.2.2020 are covered under the Scheme, i.e., the loan should not be a nonperforming asset (NPA) as on 29.2.2020 in the lending institution concerned.”

Under the Interest Waiver scheme, the govt aims to provide benefit to all borrowers by returning the difference of Compound interest and simple interest during the six months of loan moratorium announced by RBI. To qualify for the scheme, the loan account should not be of more than Rs 2 crore. 

Interest waiver on credit card: What amount would qualify for benefit?

In another FAQs released on October 29th, the ministry had said that credit card dues outstanding on 29-02-2020 would be considered for giving relief to borrowers. And the benchmark rate applicable for such relief would be the contract rate (WALR) as on 29-02-2020. 

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1‘Long-term policies, awareness to help penetration of motor insurance’
2Gold slides from all-time high level: What investors should do now?
3Are more people buying health insurance policies now? Find out