Ministry of Finance spells out guidelines for ex-gratia payment of difference between compound interest and simple interest for 6 months to borrowers in specified loan accounts (March 1 to August 31, 2020), “in view of the unprecedented and extreme COVID-19 situation…”; States that borrowers who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs. 2 Cr. as on February 29, 2020 are eligible for ex-gratia payment, and the categories of loans inter alia include – (i) MSME loans, (ii) Education loans, (iii) Housing loans, and (iv) credit card dues; Benefits of this scheme shall be routed through lending institutions, and the rate of interest would be as prevailing on Feb 29, and the payable ex-gratia amount will have to be credited to the borrower’s account by the respective lending institution; Ministry also lays down the method for calculation of simple and compound interest for each class of loans, and clarifies that the lending institutions shall credit the amount for the period to be reckoned (March 1 to August 31, 2020 – 6 months), irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27; Exercise of crediting the amount to be completed on or before November 5, 2020, whereafter lending institutions are to lodge their claim for reimbursement latest by December 15, with designated officer(s) or cell at the SBI: Ministry of Finance
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