F. No. 2/12/2020-BOAI
Government of India
Ministry of Finance
Department of Financial Services – Dated 23rd October 2020
- State Bank of India (SBI)
- All India Financial Institutions (AIFIs)
-3. All Nationalised Banks - All Banking Companies, Urban Co-operative Banks, and Non-Banking Financial
Companies (NBFCs) registered with RBI
[through RBI] - All NBFC– Micro Finance Institutions (NBFGMFIs) that are members of an
RBI-recognised Self-Regulatory Organisation
[through Micro Finance Institutions Network (MFIN) and Sa-Dhan] - All State Co-operative Banks, District Central Co-operative Banks and Regional
Rural Banks (RRBs)
[through the rural banking system supervisor {National Bank for Agriculture
and Rural Development (NABARD)}] - All Housing Finance Companies (HFCs) registered with the National Housing
Bank(NHB)
[through the supervisor of HFCs (National Housing Bank)]
Subject: Scheme for grant of ex-gratia payment of difference between compound interest
and simple interest for six months to borrowers in specified loan accounts
(1.3.2020 to 31.8.2020)
Madam/sir,
The undersigned is directed to convey that in view of the unprecedented and
extreme COVID-19 situation, the Central Government has approved “Scheme for grant
of ex-gratia payment of difference between compound interest and simple interest for six
months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020)”. Benefits under
the scheme would be routed through lending institutions. Operational guidelines for the
scheme are attached. - Eligibility criteria for ex-gratia payment under the scheme are as follows:
(a) Borrowers in the following segments/classes of loans, who have loan
accounts having sanctioned limits and outstanding amount of not exceeding
Rs. 2 crore [aggregate of all facilities with lending institutions] as on
29.2.2020, shall be eligible under the Scheme:
(i) MSME loans
(ii) Education loans
(iii) Housing loans
(iv) Consumer durable loans
(v) Credit card dues
(vi) Automobile loans
DFS letterF. No. 2/12/2020-BOAI, dated 23.10.2020
(vii) Personal loans to professionals
(viii) 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.
(b) The aforesaid eligibilityshall be subject to the following funher conditions
and stipulations:
(i) Account should be standard as on 29.2.2020, i.e., loan should not be a
Non-Performing Asset (NPA) as on 29.2.2020.
(ii) Lending institution must be either a banking company, or a Public
Sector Bank, or a Co-operative Bank [i.e., an Urban Co-operative Bank
or a State Co-operative Bank or a District Central Co-operative Bank],
or a Regional Rural Bank, or an All India Financial Institution, or a
Non- Banking Financial Company or a Housing Finance Company
registered with RBI or National Housing Bank as the case may be. A
Non-Banking Financial Company- Micro Finance Institution should
be a member of a Self-Regulatory Organisation (SRO) recognised by
RBI.
(iii) The ex-gratia payment under this scheme shall be admissible
irrespective of whether the borrower in sub-clause (1) had fully availed
or partially availed or not availed of the moratorium on repayment
announced by RBI vide its circular DORNo. BP.BC.47/21.04.048/
2019-20, dated 27.3.2020 and extended on 23.5.2020. - The period to be reckoned for crediting of difference between compound interest
and simple interest by the lending institutions mentioned in paragraph 2(b)(ii) above to
eligible borrowers as per paragraph 2 above would be from 1.3.2020 to 31.8.2020 (six
months / 184 days). For accounts closed during the said period, the period for crediting
would be from 1.3.2020 and restricted to the date of closure of such account. - The benchmarks and modalities for ex-gratia payment of difference between
compound interest and simple interest under the scheme would be as detailed in the
attached operational guidelines. The rate of interest would be as prevailing on 29.2.2020,
i.e., in case the rate of interest has changed thereafter, it shall not be reckoned for the
purposes of this computation. The payable ex-gratia amount shall have to be credited to the
account of the borrower by the respective lending institutions as ex-gratia payment under
the scheme. - The aforesaid exercise of crediting the amount as stated above in the respective
accounts of the eligible borrowers described in paragraph 2 above by the respective lending
institution shall be completed on or before 5.11.2020. - After the exercise mentioned in paragraph 5 above has been completed, lending
institutions can lodge their claim for reimbursement latest by 15.12.2020. Claims shall be
submitted to designated officer(s) / cell at the State Bank of India (SBI). SBI is advised to
appropriately equip its designated officer(s) / cell for processing such claims in a timely
manner, and to notify details of the same on its website.
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Yours faithfully,
DFS letter F. No. 2/12/2020- BOAl, dated 23.10.2020 - Issues and concerns relating to claims submitted by the lending institutions shall be
handled through the designated cell at SBI in consultation with Government of India. Each
lending institution shall put in place a grievance redressal mechanism for the eligible
borrowers for redressal of their grievances arising out of the present scheme within one
week from the date of issuance of these scheme guidelines, at appropriate level(s). W’hile
putting in place such grievance redressal mechanism, lending institutions can keep in mind
the communication dated 1.10.2020 issued by the Indian Banks’ Association in respect of
resolution framework for COVID-19 related stress for guidance. Grievances, if any, of the
lending institutions shall be resolved through the designated cell at SBI in consultation with
the Ministry of Finance, Government of India. - In case of any issues/ queries relating to interpretation of this scheme, the decision
of Government of India shall be finaL
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