Interest-on-Interest concession to cost exchequer Rs 7,500 cr: Crisil

New Delhi, Oct 26 : The ex-gratia payment of interest-on-interest by banks and non-banking finance companies for the moratorium period would be tantamount to a Rs 7,500 crore benefit for eligible borrowers, ratings agency Crisil’s analysis showed on Monday.
The tab for such a move is being picked up by the government.
The analysis is based on guidelines for such payments announced by the Ministry of Finance.
“The benefit will be extended to borrowers with outstanding loans (standard as on February 29, 2020) of less than Rs 2 crore under select categories, irrespective of whether the moratorium was availed of or not,” the ratings agency said in a statement.
“Such loans account for more than 40 per cent of systemic credit and 75 per cent of borrowers.” According to the statement, the cost to exchequer would have halved, if the waiver was allowed only where moratorium was availed of.