SC waives compound interest on loans under moratorium due to COVID

Small Scale Industrial Manufactures Association (Regd.) Vs Union of India and others (Supreme Court)

As the charging of penal interest/interest on interest/compound interest during the moratorium period is concerned, it stands absolutely on a different footing. At this stage, it is required to be noted that in fact the Central Government has come out with a policy decision subsequently by which it is decided not to charge the interest on interest on the loans up to Rs. 2 crores. However, such relief is restricted to the following categories:

(i) MSME loans up to Rs.2 crore

(ii) Education loans up to Rs.2 crore

(iii) Housing loans up to Rs.2 crore

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