Government bring the financial relief to crores of borrowers. Scheme that will provide interest compounding relief for the six month moratorium extended to mitigate COVID19 effect.
The relief will come to borrowers in the form of grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30).
Finance Ministry direct the all banks for give interest cashback – SBI, National Banks, NBFC’s, State Co operative banks, regional rural banks, All housing finance companies to grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30).
List / Type of loan which are coming under ex – gratia scheme
- MSME Loans
- Education Loans
- Housing Loans
- Consumer Durable Loans
- Credit Card Dues
- Automobile Loans
- Personal loans to professionals
- Consumption Loans
Any borrowers whose aggregate of all facilities with lending institutions is more than Rs.2 crore (sanctioned limits or outstanding amount) will not be a eligible for ex-gratia payment under this scheme.
Other conditions for eligibility:
- Account / loan account should be standard as on 29/02/2020. loan should not be NPA as on 29/02/2020.
- Lending institution must be either a banking company or registered under banking norms of RBI.
- The ex-gratia payment under this scheme shall be admissible irrespective of whether the borrower in sub-clause (1) had fully availed or partially availed or not availed of the moratorium on repayment announced by RBI ride its circular DOR.No. BP.BC.47/21.04.048/ 2019-20, dated 27.3.2020 and extended on 23.5.2020.
Lending institutions can lodge their claim for reimbursement latest by December 15 only after crediting the ex-gratia amount. Claims will have to be pre-audited by the statutory auditor of the lending institution and a certificate has to be attached with the claim. State Bank of India will be the nodal agency for the scheme and will receive funds from the central government for settlement of claims of lending institutions.
There is however no clarity or commitment on how soon the reimbursements will happen, banking industry observers pointed out.
Each of the lending institution have been asked to put in place a grievance redressal mechanism for eligible borrowers within one week. Grievances, if any, of the lending institutions would be resolved through the designated cell at SBI in consultation with Finance Ministry.