Bankers fear the government’s decision to waive some interest payments on loans under a Covid-19 support plan will create unnecessary work for lenders and lead to more litigation, without providing much of a boost for the sagging economy.

In an October 2 filing with the Supreme Court, seen by Reuters, the government said it is amending a controversial clause in a relief plan that allowed distressed borrowers to skip repayments for six months but then charged them “interest-on-interest” on the delayed payments, putting them deeper in debt.

The government will bear the cost, which could be as high as $1 billion, according to analysts.

Read more at TOI