Is it curtains for the interest-waiver issue?

Interest is not being waived and the benefit is extended to all - including those who have not availed of the loan moratorium. So, it will not vitiate the credit culture

On Friday, the finance ministry’s Department of Financial Services circulated a scheme among all lenders in India for grant of ex gratia payment to make good the difference between compound and simple interest for the six-month moratorium (March-August 2020). The scheme is applicable to all borrowers who have up to Rs 2 crore exposure to banks and non-banking financial companies, including housing finance companies and microfinance institutions. The exposure could be in the form of small loans, education, housing, consumer durable, auto, personal and consumption loans, and credit card dues.

In Latin, “ex gratia” means “by favour”. Such payments are a