InvestorQ : When is the interest waiver likely to be implemented by the banks in practice?
Katherine Gonsalves made post

When is the interest waiver likely to be implemented by the banks in practice?

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rhea Babu answered.
7 months ago
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The Reserve Bank of India has instructed all the banks and lenders covered under the waiver of interest on interest scheme to complete the refund of interest on interest component latest by November 05.

As per the announcement made by the Finance Ministry in the previous week, all banks and NBFCs will have to refund the interest on interest or the compounded portion for the 6 months period between Mar-20 and Aug-20.

Once such amount is transferred back to the borrower, then the bank / NBFC can claim the refund for the same from the government via their appointed nodal bank, SBI. The entire cost of this waiver is being borne by the government and it is likely to cost the state close to Rs.7500 crore.

The total relief is expected to be between 1.6% and 2% of the total EMI payable during this period by borrowers and that would depend on the rate of interest being charged. Any penalties charged during this period will not be refunded.

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