limit for gst registration

As per section 22 person is liable to get registered under gst law if his aggregate turnover exeeds RS. 20laks from supply of goods and services
interest not come under definition of turnover not related to his business hence not required registration under gst law

if interest on loan related to business then that will be included in turnover

Yes , he is correct your interest income will be added to compute your aggregate income , so you cross the threshold limit 20lac , & Registration is mandatory

Yes, you are liable for Registration since your Aggregate Turnover exceeds ₹ 20 lakhs.

Refer SECTION 2(6) of CGST Act 2017 for the definition of Aggregate Turnover.

Interest Income from loan given to third parties will be included in your Aggregate Turnover.

Moreover, if you receive Interest from Bank, that is an exempt supply vide Notification No. 12/2017 CT, and as per the definition given in SECTION 2(6), Aggregate Turnover also includes Exempt Supplies.