In its affidavit filed on October 23, Centre has informed the Supreme Court that the scheme formulated to give benefit of compound interest waiver to small borrowers for period of loan moratorium will be given effect to by November 5.
The Centre, in this affidavit, is responding to the Apex Court’s question as to when the scheme announced would be implemented. The Court, during the previous hearing in the case, had asked the Centre and RBI to give a concrete answer as to when the scheme will be implemented.
The Centre’s decision to bear the economic burden of compound interest waiver for small borrowers to extend the benefit to the eligible beneficiaries is a “welcome step”, the Court had said, but “the small borrowers want to see some results. Consider the plight of the common man,” the Bench headed by Justice Ashok Bhushan had added.
Now, the Court is told that the Centre has directed all the lending institutions to give effect to this scheme of compound interest waiver by November 5 by which time the amount calculated as per the scheme would have to be credited to the accounts of the eligible beneficiaries.
There are eight categories of eligible beneficiaries for this scheme and the difference between the compound interest and simple interest computed for these beneficiaries for the period between March 1 and August 31 will be credited back to them.
This decision of waiver of compound interestwas taken by the Finance Ministry and assurance given to this effect by the government lawyers before the Supreme Court.
The decision, however, came to be approved by the Cabinet on October 21 and pursuant to this approval, the Finance Ministry has now issued the scheme, the affidavit submits.
One of the steps taken by the government was to provide compound interest waiver to small borrowers.