Vishal Sharma 24 August 2020

Bank loan moratorium

Respected Experts.

I had availed a Personal Loan from.a bank. But due RBI moratorium no EMI was deducted for last three months. As the moratorium is going to be ended on 31st March, I have received a message from the bank that my loan term is extended by 3 months and will end in June 2024 insinst he of March 2024 and the EMI has been increased by Rs 700.

Now as loan period is extended by 3 months is increased EMI justified ?

That means interest on intetesi.

Kindly advised. I think Supreme Court has said something on this.

Regards

Reply Follow

3 Replies

Neha Mantri 01 December 2020

No, banks cannot charge interest on interest for the 6-month moratorium period as the Supreme Court has ruled that there is "no merit in charging interest on interest" for deferred EMIs for the said period and asked the government to interfere in the matter.

The government has now directed all Banks and non-banking financial institutions to waive the ‘interest on interest’ charged on loans below Rs.2 Crore in 8 categories which are MSMEs, education, housing, consumer durables, credit card, auto, personal, and consumption for the 6-month moratorium period (31^st March, 2020-31^st August,2020).