Cabinet approves payment of Rs973.74 cr interest dues to eligible borrowers for 6 month loan moratorium period
24 Jan 2022
The union cabinet has approved a scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to distressed/vulnerable category of borrowers in specified loan accounts.
The cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the payment of ex-gratia amount of Rs973.74 crore pertaining to remaining claims submitted by lending institutions (LIs) under the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months (ie, from 1 March 2020 to 31 August 2020) to borrowers in specified loan accounts.
The grant of ex-gratia payment of difference between compound interest and simple interest during the six month moratorium period to distressed/vulnerable category of borrowers, irrespective of whether the borrower had availed of moratorium or not, would equitably help small borrowers bear the stress on account of the pandemic and get back on their feet, a cabinet release stated..
Operational guidelines for the scheme are already issued with the approval of the cabinet and the amount of Rs973.74 crore will be disbursed in accordance with the said operational guidelines, the release added.
The cabinet had, in October 2020, approved the “Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1 March 2020 to 31 August 2020),” envisaging an outlay of Rs5,500 crore, in the context of the Covid-19 pandemic. The following category of borrowers were eligible for ex-gratia payment under the scheme:
- MSME loans up to Rs2 crore
- Education loans up to Rs2 crore
- Housing loans up to Rs2 crore
- Consumer durable loans up to Rs2 crore
- Credit card dues up to Rs2 crore
- Auto loans up to Rs2 crore
- Personal loans to professionals up to Rs2 crore
- Consumption loans up to Rs2 crore
Budget allocation of Rs5,500 crore was made for the scheme in FY 2020-2021. The whole amount of Rs5,500 crore, as approved by the cabinet, has been disbursed to SBI, the nodal agency under the scheme, for subsequent reimbursement to lending institutions.
The estimated amount of Rs5,500 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 Rs6,473.74 crore approx. from lending institutions. As Rs5,500 crore has already been disbursed to SBI, approval of the cabinet has been sought for balance amount of Rs973.74 crore.