CURRENT AFFAIRS

Detailed explanation-1: -As per the scheme, the difference between the compound interest and simple interest will be reimbursed to the eligible borrowers, irrespective of whether he/she availed of the moratorium or not.

Detailed explanation-2: -The apex court ruled against giving a complete interest waiver to borrowers. However, it said all borrowers need to be compensated for interest-on-interest charged during the 6-month moratorium period. The SC observed that charging compound interest amounts to penal interest.

Detailed explanation-3: -They further said, banks would provide compound interest waiver for the period a borrower had availed moratorium. For example, if a borrower availed moratorium of three months, the waiver would be for that period.

Detailed explanation-4: -For loans up to ₹3 lakh under the scheme, banks will extend credit at a concessional interest rate of 7% per annum. For outstanding credit balance upto ₹3 lakh, banks will be subvented at a uniform rate of 4.5% per annum during FY 2022-23. iii.