After the Supreme Court pronounced its judgement in the loan moratorium case last week, lenders were particularly concerned about one specific detail. The court said every borrower, irrespective of the outstanding loan, will be eligible for the compound interest waiver for the March-April period. Mint takes a closer look at how this additional benefit will affect lenders and why they are seeking government aid. In October last year, the government had agreed to bear the burden of compound interest waiver for retail and small business loans up to ₹2 crore. The Indian Banks’ Association (IBA), a lobby body representing the interests of banks, wrote to the government seeking reimbursement of the compound interest that has to be returned to borrowers.

Source: Mint March 31, 2021 06:45 UTC