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Banks told to credit ‘interest on interest’ to borrowers
Why is it in news?
- The Reserve Bank of India(RBI) has told the Supreme Court that it has issued a notification to banks on refund of extra money to the borrowers.
Details
- RBI has advised commercial banks, coop. banks, financial institutions and non-banking financial companies to comply with the government’s payback scheme.
- The central government had asked the banks to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the RBI’s loan moratorium scheme by November 5.
- The government scheme is meant to bring “additional relief” to borrowers affected by the pandemic-induced financial distress.