[COVID-19] Centre approves Scheme for ex gratia payment of difference between compound and simple interest to borrowers

In view of COVID-19, the Central Government has approved a “Scheme for grant of ex gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts.”.This six months shall be from March 1, 2020 to August 31, 2020 and the following category of borrowers are eligible for the scheme:- MSME loans- Education loans- Housing loans- Consumer durable loans- Credit card dues- Automobile loans- Personal loan to professionals- Consumption loans.Any borrower whose aggregate of all facilities with lending institutions is more than Rs 2 crore (sanctioned limits or outstanding amount) will not be eligible for ex gratia payment under this scheme..The eligibility is also subject to the following conditions and stipulations:- Loan account should not be a non-performing asset on February 29,2020.- Lending institution must be either a banking company or a public sector bank or a co-operative bank or a Regional Rural Bank or an All India Financial Institution or a NBFC or a registered Housing Finance Company.- The ex gratia payment under this scheme shall be admissible irrespective of whether the borrower concerned had availed the moratorium on repayment announced by RBI..The rate of interest would be as prevailing on February 29, 2020..Benefits under the scheme would be routed through lending institutions and the exercise of crediting the amount by the respective lending institutions has to be completed on or before November 5, 2020..Issues and concerns relating to claims submitted by lending institutions shall be handled through the designated cell at SBI in consultation with Government of India..Each lending institution shall also put in place a grievance mechanism for redressal of grievance of eligible borrowers. .Detailed operational guidelines for the Scheme is attached with the Approval Letter: