J&K’s small, retail borrowers to benefit from SC’s interest waive off move

3 October 2020, 3:22 pm 1,405 Comments

Srinagar: Retail borrowers and small businesses from Jammu & Kashmir are likely to benefit the most from the government’s decision to waive off “interest on interest” charges on loans up to ₹2 crore for six months through August, financial analysts say.

Which categories will benefit in Jammu and Kashmir?

The benefit will be extended to borrowers across the country, including borrowers from Jammu & Kashmir for loans availed by micro, small and medium enterprises (MSMEs), education loans, housing, consumer durables, credit card dues, auto loans, personal and professional loans and consumption loans, the government has informed the Supreme Court.

While the final decision rests with the Supreme Court, the government’s plan to bear the burden will also encompass borrowers who did not avail of the deferment benefit.

The Reserve Bank of India (RBI) had on 22 May extended moratorium on term loans till 31 August amid the nationwide lockdown due to covid-19. In March, it had allowed a three-month moratorium from paying EMIs and payment of all term loans due between 1 March and 31 May.

“This endeavour will be over and above the support of ₹3.7 trillion to MSMEs, ₹70,000 crore for home loans, etc. already exerted through the Garib Kalyan and Aatma Nirbhar packages announced by the government earlier,” the government said in an affidavit to the Supreme Court.