The Reserve Bank of India (RBI) has notified the Centre'sscheme for ex-gratia payment of difference between interest on loans of up toRs 2 crore in a bid to provide amid the pandemic.
In a notification, RBI said: "All lending institutionsare advised to be guided by the provisions of the Scheme and take necessaryaction within the stipulated timeline."
The finance ministry wants all payments to be credited inthe accounts of borrowers well before Diwali by November 5.
Under the scheme, the ex gratia payment -- the differencebetween compound interest and simple interest for six months -- will be made toborrowers whose aggregate loan sanctions and outstanding is not more than Rs 2crore as on February 29, 2020. All categories of loans -- MSME, education,housing, personal, consumer -- and credit card dues will be eligible.
The scheme can be availed by designated class of borrowersfrom March 1 to August 31, 2020.
Housing loans, education loans, credit card dues, autoloans, MSME loans, consumer durable loans and consumption loans come under theambit of the scheme.
As per the scheme, the lending institutions shall credit thedifference between compound interest and simple interest with regard to theeligible borrowers in respective accounts for the said period irrespective ofwhether the borrower fully or partially availed the moratorium on repayment ofloan announced by the RBI on March 27, 2020.
The lending institution after crediting the amount willclaim the reimbursement from the Central government. All banks and NBFCs arecovered under the scheme.
The government has clarified that the payment does notconstitute a legal, contractual or equitable liability of the Centralgovernment and is only an ex-gratia payment to borrowers in view of theCovid-19 pandemic.
November 5 is the deadline for the payment to be credited inthe bank accounts.