New Delhi: The Indian Banks’ Association (IBA) on behalf of lenders has approached the finance ministry to refund the burden fallen on their shoulders due to a recent Supreme Court judgment on the waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020.
The March judgment of the apex court directed the banks to waive off compound interest on loans above Rs 2 crore availing moratorium as loans below this got blanket interest on interest waiver in November last year.
Compound interest support scheme for loan moratorium cost the government Rs 5,500 crore during 2020-21, and the scheme covered all borrowers including the prompt one who did not avail moratorium.
Various banks are at the different stages of executing the order.
Punjab & Sind Bank Managing Director S Krishnan said the burden on the bank due to waiver works out to be around Rs 30 crore.
The issue of reimbursement of the waiver amount by the government is being pursued by IBA on behalf of the banks, he said.
Asked if the finance ministry has responded to their request, he said, “So far, we have not heard anything positive on this.”
