Login With Google
Refund penal interest on EMIs: Supreme Court
Why is it in news?
- The Supreme Court directed banks and financial institutions to refund compound interest.
Details:
- The Court also directed to return interest on interest or penal interest collected on EMI.
- Banks and Financial lenders had collected interest on interest during the period of moratorium from March 1 to August 31 last year.
- The court said the amount accumulated as compound/penal interest should be given as credit/adjusted in the next instalment of the loan account.
- The judgment also lifted its nearly six-month bar on the lenders from declaring accounts of borrowers as non-performing assets (NPAs).
Source: The Hindu.