Iyerjayadevan (39 Points)
30 March 2010DEAR ALL,
I WOULD LIKE TO KNOW HOW INTEREST DURING MORATORIUM PERIOD IS TREATED BY BANKS AND FINANACIAL INSTITUTIONS WHILE FINANCING A PROJECT. HOW IT IS CONSIDERED IN THE PROJECT REPORT?IS INTEREST PAYABLE DURING MORATORIUM PERIOD?OR IS THE ACCRUED INTEREST ADDED TO NORMA L INTEREST AFTER THE MORA TORIUM PERIOD IS OVER?
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26263 Points)
Replied 12 April 2010
Interest due is required to be paid during Moratorium period. It means banks charge interest as per their regular criteria of charging interest. Different projects have different moratorium period. An electricity project will definitely have more moratorium period than a loan given to another type of project which is likely to commence its business activities within a short period say six months.
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