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According to the official statement, granting an ex-gratia payment of the difference between compound interest and simple interest during the six month moratorium period to the distressed will help small borrowers bear the stress on account of the pandemic and get back on their feet.
Photo Credit : PTI
The Union Cabinet on Wednesday has approved the payment of ex-gratia amount of Rs. 973.74 crore pertaining to remaining claims submitted by Lending Institutions (LIs) under Scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts.
According to the official statement, granting an ex-gratia payment of the difference between compound interest and simple interest during the six month moratorium period to the distressed will help small borrowers bear the stress on account of the pandemic and get back on their feet.
In the context of the COVID-19 pandemic, “Scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020)” was approved by the Cabinet in October 2020, envisaging therein an outlay of Rs. 5,500 crore. The following category of borrowers was eligible for ex-gratia payment under the scheme:
The estimated amount of Rs. 5,500 crore was arrived at by extrapolating the share of SBI and Scheduled Commercial Banks for the aforementioned category of loans. It was also apprised to the Cabinet that the actual amount would be known once individual lending institutions submit their pre-audited account-wise claims.
Now, SBI has informed that it has received consolidated claims of Rs. 6,473.74 crore approx. from lending institutions. As Rs. 5,500 crore has already been disbursed to SBI, approval of the Cabinet is now being sought for a balance amount of Rs. 973.74 crore.