The Finance Ministry has clarified that agriculture and allied activity loans aren't eligible for the interest on interest waiver announced by the government recently. 

The relief shall cover MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal loans to professionals and consumption loans. Crop and tractor loans come under agriculture and allied activities loans and aren't a part of the eight segments or classes eligible under the scheme.

The RBI had asked all lending institutions, including non-banking financial companies, to make sure that the scheme of waiver of interest on interest for loans up to Rs.2 crores for the six-month moratorium period to be implemented by November 5.

The government had announced the scheme for grant of ex-gratia payment of difference between interest and simple interest for six months to borrowers in specified loan accounts. Loan accounts with sanctioned limits and outstanding not exceeding Rs.2 crores (aggregate of all facilities with all the lending institutions) are eligible and such accounts should be standard on the books of lending institutions as on 29th February 2020.

The period reckoned for refund shall be from March 1 to August 21, 2020, that's a six months period or 184 days. The ex-gratia relief was credited to the account of all eligible borrowers.

As per the scheme, the lending institutions credited the difference between interest and simple interest with reference to the eligible borrowers in respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium announced by the RBI on March 27, 2020.


The scheme is additionally applicable on those that haven't availed the moratorium scheme and continued with the repayment of loans. The scheme, which was announced as per the direction of the Supreme Court, is likely to cost the exchequer Rs 6,500 crore.