No compound/penal interest on loans.

On 23rd March, 2021 the Supreme Court delivered a judgment holding that no compound interest or penal interests shall be levied upon a person during the moratorium. Relevant extracts of the judgment delivered by Justice M.R. Shah have been reproduced below-

“However, it is directed that there shall not be any charge of interest on interest/compound interest/penal interest for the period during the moratorium and any amount already recovered under the same head, namely, interest on interest/penal interest/compound interest shall be refunded to the concerned borrowers and to be given credit/adjusted in the next instalment of the loan account. “