Cabinet okays disbursement of additional compound interest waiver claims

238 million borrowers got waiver of interest-on-interest on loans up to Rs 2 crore

The Union Cabinet has approved an additional payment of about Rs 973 crore on account of pending claims for the government’s compound interest waiver scheme that reimbursed “interest-on-interest” charged on small ticket loans up to Rs 2 crore.

The Centre received total claims of Rs 6,473 crore from 238 million borrowers under the “Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (March 3, 2020 to August 31, 2020)” against Rs 5,500 crore estimated as the outgo earlier. The government had made provision of Rs 5,500 in