After the nationwide lockdown was announced in March last year, the Reserve Bank of India announced a loan repayment moratorium for three months, which was later extended by another three months till August. However, the EMIs and interest during this moratorium were postponed and not waived off .Thus compound interest was also charged on the accumulated amount of the EMIs.
Later the government agreed to waive compound interest on instalments of loans up to only Rs 2 crore payable during the six-month moratorium period. The matter reached the Supreme court and the top court directed a waiver of compound interest for all loans during the moratorium period.
To get deeper insights about the Supreme court judgement and its impact, kindly go through this post.
Source Credits: Outlook India, Business Standard, The Economic Times