new Delhi: The matter of not taking interest on EMIs postponed during the matorium period is once again in the Supreme Court. During the last hearing, the government had filed an affidavit in the Supreme Court stating that a decision has been taken to give concession to people taking loans up to two crore rupees. Compound interest will not be charged on the outstanding 6-month EMI.
On this, as soon as the hearing of the case started before the bench headed by Justice Ashok Bhushan, people belonging to different industries declared the government’s affidavit insufficient. In the trial, the court asked the Reserve Bank what plans it had made to give relief to the industry.
————————————————– ————————————————– ——-
What you read above is Shieldis news, this news can be understandable to those who have knowledge of economy, law and their technical terms. But it is a bit difficult for the common man to understand. But in the last few times, the word has been heard so often that the question must have come in everyone’s mind at least once, what is it? After all, why the country’s largest court is giving so much attention to this issue. We will answer all questions.
Lone Mattorium: The Supreme Court expressed its mischief on the government’s affidavit, asking for relief to be given to every sector.
So let’s know what the Lone Moratorium is?
A matorium means if you are paying for something, it will be withheld for a certain time. Suppose if you have taken a loan, you can stop its EMI for a few months. Yes, but this does not mean that your EMI has been done.
We all know that due to Covid-19, the lockdown there has done great harm to the economy of the country. Millions went into lockdown, people’s salaries were cut. In view of this, on May 22, during the announcement of the Monetary Policy, the RBI said that the loan matorium is being raised for three months. It was announced for the first three months.
How does the materorium work, what is the use?
As we told you, your EMI in the matorium can be held for some time. But one thing to keep in mind here is that there will be no discount on the interest charged on your EMI. Suppose you pay EMI after three months under the matorium, then you have to pay interest for the last three months.
You will ask what is the use of this? So the answer is that in general, if you are unable to pay EMI, then interest on it is seen that at the same time your credit rating also deteriorates but not giving EMI during the matorium does not affect the credit rating. Your credit rating will not go down.
RBI affidavit in SC- We gave relief to the small borrowers, the issue of big loans was left to the bank and the borrower.
Will the loan matorium benefit the most?
The biggest advantage of loan matoriums is for industry businesses. Failure to run a business during lockdown has also made it difficult to fill a loan. So it is believed that if the EMI is replenished and then as the business grows, the companies can repay their loan.
Who can loan lone matorium?
Along with the companies for loan matorium, any person can get the matorium done for any of his loans. Be it home loan, car loan or credit card bill. Note that in three months, 30% of the people in some bank took advantage of this facility. Up to 70% of loans in some small bank went to the matorium.
Supreme Court verdict: The financier will own the car if the loan installment is not repaid
How did the matter reach the Supreme Court?
A large number of people took advantage of the discount given for postponing the installment from March to August. Their complaint was that now they are charging extra interest on the outstanding balance of the bank. From here the matter reached the Supreme Court.
The Supreme Court had asked the Central Government the question as to why interest is being charged on EMI over interest. In response, the government told the Supreme Court that interest will not be charged on the outstanding installments for loans up to Rs 2 crore.
The category of loans for which the government has proposed not to charge interest on interest is small and medium level business loans, education loans, home loans, loans for consumer goods, credit cards up to Rs 2 crore. Arrears, car-two wheeler loans and personal loans.
The Supreme Court while hearing the case held that banks have the right to recover principal and interest. But it is not right for advertising EMI to charge interest above interest.
6000 to 7000 crores will be spent by the government on loan matorium
The cost of waiving the interest charged on the EMI of loans up to Rs 2 crore will be on the government. About 6000 to 7000 crores was spent on this to the government. The government also told the court that the war against Corona could also be affected due to this expense.
read this also
IPhone 12 is equipped with the latest features, know 5 special things related to the phone
Apple launches iPhone 12 Pro Max, Learn from price to features
Apple launches HomePod Mini with iPhone 12 series, know how much it is priced and what is its specialty