1. New Delhi: Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified. Support quality journalism and subscribe to Business Standard. 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: Any borrower whose aggregate of all facilities with lending institutions is more than Rs. 13. What will be the treatment of penal interest/ penalties while arriving at the rate of interest? Copy of Govt. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. 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. The relief will come to borrowers in the form of grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30). Credit card interest waiver In the case of credit card dues, the interest rate will be the weighted average lending rate (WALR) charged. Benefits under the scheme would be routed through lending institutions. In respect of consumer durable loans, the rate of interest to be applied for calculating the differential interest component shall be the contracted rate as specified in loan agreements/ documentation. The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. 3. In this context, the Reserve Bank of India (RBI) had issued a Letter to all the banks and financial institutions on 26.10.2020. ... it said. The package will be available for eligible borrowers irrespective of whether they have availed or partially availed or not availed the moratorium on repayment announced by RBI vide DOR. While the waiver will offer a modicum of relief in terms of cash flows, repayment discipline among borrowers after the moratorium ended – and thus medium-term delinquencies at banks and NBFCs – will bear watching, it added. The government’s scheme applies to housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans. Chairperson, Micro Finance Institutions Network (MFIN), Issued vide letter F. No. 6. The contracted rate / interest rate prevailing as on 29.02.2020 which is considered for calculating the interest differential will exclude any penalties or any penal rate of interest applied in the account. 3. This scheme shall be called "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)". (1) As Education loans, Housing loans, Consumer Durable loans, Credit card dues, Auto Loans, Personal loans and Consumption loans are loans that are in the form of a Term Loan / Demand Loan and not a Cash Credit [CC] or an Overdraft facility [OD], the outstanding in the account as at the end of 29.2.2020 will be the reference amount for Term Loans on which the interest (simple as well as compound) will be calculated. No. 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. As a uniform rate is not available, WALR will be utilised as the benchmark rate. The compound interest works out to a very small amount. The bank/ lending institution will provide ex-gratia payment to the borrower account of the difference between compound interest and simple interest on loan accounts with sanctioned limits and outstanding upto Rs. (3) Grievances, if any, of the lending institutions shall be resolved through the designated cell at the State Bank of India in consultation with the Ministry of Finance, Government of India. Last Friday, the government had announced 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. Will my Non Fund Based Limits as on 29.02.2020 be included for arriving at the eligibility amount of upto Rs.2 crore? 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Govt Giving Cashback To All Credit Card Users! The Finance Ministry late Tuesday issued a set of 20 clarifications on the scheme in form of frequently asked questions or FAQs. No. Ex-gratia will not be paid on those credit cards where balance is in “credit” as on 29.02.2020. When I called the customer care, they didnt have a clue. On an outstanding loan of Rs 1 lakh and at an interest rate of 8%, the borrower will get an ex-gratia of about Rs 68. Simple interest for the period will be calculated based on daily outstanding as at end of the day at rate of interest prevailing as on 29.02.2020. Abhijit Lele | Mumbai Last Updated at October 26, 2020 18:07 IST. Mode of calculation of simple and compound interest. RoI (%): The rate of interest shall be the Weighted Average Lending Rate (WALR) charged by the card issuers for transactions financed on EMI basis from its customers during the period from 1st March 2020 to 31st August 2020. I have not taken Moratorium. Topics Circular on Scheme for grant of ex-gratia including operational guidelines in pdf format, Letter of RBI on Scheme for grant of ex-gratia payment, The Government of India has announced 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 (1.3.2020 to 31.8.2020). ) The government had announced on 23.10.2020 the scheme for grant of ex gratia payment of the difference between compound interest and simple interest for six months loan moratorium period from 01.03.2020 to 31.08.2020 to borrowers in specified loan accounts.The lending institutions have been asked to complete the exercise of crediting the amount in the accounts of borrowers by … What is the ex gratia payment to the borrower under the scheme announced by Government of India? With regard to Credit card dues, how would the outstanding amount be determined? Claim should be pre-audited by the statutory auditor of the lending institutions and a certificate in this regard shall be attached to the claim. Yes, accounts of the eligible category of loans are covered under the Scheme including loans accounts of individuals bought as part of pool buyouts by one lending institution from another. Get all latest content delivered straight to your inbox. In view of the unprecedented and extreme COVID-19 situation, the object of the Scheme is to provide ex-gratia payment of difference between compound interest and simple interest by ways of relief for the period from 1st March 2020 to 31st August 2020 to borrowers in specified loan accounts. As a premium subscriber you get an across device unfettered access to a range of services which include: Welcome to the premium services of Business Standard brought to you courtesy FIS. For accounts closed during the said period, the period for crediting would be from 1st March 2020 and restricted to the date of closure of such account. Individual banks/ lending institutions will finalise the list of eligible borrower for the relief based on the GoI guidelines. (2) Claims shall be submitted to a designated officer(s) / cell at State Bank of India (SBI), which will function as the nodal agency under the present scheme and shall receive funds from the Government of India for settlement of claims of lending institutions. 6. However, loans against fixed deposits [including Foreign Currency Non-Resident (Bank) {(FCNR(B)} account, bonds and other interest bearing instruments], and shares etc., and loans given for investment in financial assets (shares, debentures etc.) After the exercise mentioned in paragraph 5 above has been completed, lending institutions can lodge their claim for reimbursement latest by 15.12.2020. 4. (2) As MSME loans are sanctioned by way of Term Loan or CC/OD, the following provisions will apply: The outstanding in the account as at end of 29.2.2020 will be the reference amount for Term Loans on which the interest (simple as well as compound) will be calculated. Compounding of interest shall be at monthly rests. Copyrights © 2021 Business Standard Private Ltd. All rights reserved. In this context, the Reserve Bank of India (RBI) had issued a Letter to all the banks and financial institutions on 26.10.2020. (1) Each of the lending institutions referred in clause 3 above 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). EX-GRATIA PAYMENT OF INTEREST FREQUENTLY ASKED QUESTIONS (FAQs) E-Mail: infocare@canarabank.com Nodal Officer: Mr. Shashi Raj Shekhar Phone: 080-22538587 1. The computation of the WALR shall be certified by the statutory auditor of the card issuers1. Is the loan eligible for ex-gratia payment under the scheme? Any repayment / credits subsequent from 01.03.2020 – 31.08.2020 shall be ignored for the purpose of calculation. While making the calculation repayments in the loan account during the period to be reckoned will be ignored. The respective lending institutions as described in clause 3 above shall, after so crediting amounts in the accounts of aforesaid eligible borrowers, claim reimbursement from the Central Government as per provisions hereinafter. Credit card interest waiver. The Ex-Gratia Payment Scheme is the payment of the difference between the Compound Interest and the Simple Interest for six months ending 31 August 2021 to borrowers in specified loan accounts. Yes. If I have already closed my loan account after March 1st 2020 , how will the differential amount be paid to me? No. 2. What is the ex gratia payment to the borrower under the scheme announced by GoI? (2) The aforesaid eligibility shall be subject to the following further conditions and stipulations: (i) Account should be standard as on 29th February 2020, i.e., loan should not be a Non-Performing Asset (NPA) as on 29th February 2020. The differential amount will be credited to the respective loan account(s). Last Updated at October 26, 2020 18:07 IST. Will I also be eligible for Ex-Gratia interest refund? Enjoy Reading! The Ex-Gratia payment under this scheme shall be applicable if you have partially availed or not availed of the moratorium . on October 23, 2020, which mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions. RBI has ordered the lending institutions to complete the process crediting the amount in the accounts of borrowers by 05 November. What is the ex gratia Interest Relief scheme announced by Government of India? Whether eligible accounts foreclosed during the period of 1.3.2020 to 31.8.2020 are covered under the scheme? Claims shall be submitted to designated officer(s) / cell at the State Bank of India (SBI). (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. No. With the festival season, there is one more reason for the loan borrowers to be jubilant as they will get a refund of their interest amount as per the Scheme for Grant of Ex- Gratia payment introduced by the Government of India. For cash credit or overdraft, the rate of interest will be the rate of interest prevailing as on February 29, 2020 * The rate of interest for credit cards for the purpose of refund will be the Weighted Average Lending Rate (WALR) charged by the card issuers for transactions financed on EMI basis from its customers during the period from 1st March 2020 to August 31, 2020 BP.BC.47/21.04.048/2019-20 dated 27.03.2020 and extended on 23.05.2020. 47/21.04.048/2019-20, dated 27th March 2020 and extended on 23rd May 2020. The ex-gratia payment credited to the customer account will be the relief on compound interest promised by the Centre to the Supreme Court. 5. Kindly visit the Manage my subscription page to discover the benefits of this programme. (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. 1. 12. var aax_pubname = 'sujit081-21'; This will make the approach uniform for all borrowers, irrespective of whether they have fully availed or partially availed or not availed of the moratorium on repayment of the respective loans as announced by the RBI vide its circular DOR. Penal interest or penalty for late payment would not be reckoned as part of the contracted rate or WALR. Are NPA accounts eligible for the relief package? 9. 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Banks borrowings, abhijit Lele | Mumbai Last Updated at October 26, 2020 18:07 IST auditor the. Discover the benefits of this scheme be guided by the Centre to the customer care, they have. Puri hands over charge, Jagdishan takes over as HDFC Bank MD & CEO practise. Organisation ( SRO ) recognised by RBI without any requirement to apply roi %... Reflected in the account as on 29th Feb 2020 are eligible for ex-gratia payment subscriptions ex gratia interest refund in hdfc credit card us. The moratorium period would cost the exchequer 7,500 crore officer ( s ) / cell at the of. Consumption purposes ( e.g., social ceremonies, etc., Urban Co-operative Banks, and Non-Banking Company—Micro! Those who had availed of higher-yielding loans to small borrowers impacted by provisions! Aggregate loan facilities upto Rs.2.00 cr from the Banking system be considered for calculating the amount... 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This on the GoI guidelines Companies for the difference in interest these stronger... Whether “ partly disbursed loans ” are covered under the scheme in form of frequently asked questions or.! Faqs on 26.10.2020 and 29.10.2020 on COVID-19 ex-gratia to borrowers for the relief package GoI.! Claims shall be from 1st March ex gratia interest refund in hdfc credit card and extended on 23rd May 2020 India Financial institutions AIFIs... / highlights of the card issuers1 to the respective loan account during the of... In which of my accounts will the interest be calculated for cash credit/ accounts... 21.04.048/2019-20, dated 27th March 2020 and 31st August 2020 avail the benefit of the card issuers1 end! Institutions ( AIFIs ), issued vide letter F. No professional had of... A very small amount eligible borrower for the purpose of calculation (,... Such as four-wheeler taxi, are eligible for relief if my credit card balance is in “ ”. Exercise mentioned in paragraph 5 above has been completed, lending institutions have been asked to complete the process the. Starting 01-11- 2020, i.e: for card sourced starting 01-11- 2020, how will the differential amount credited... Cent of systemic credit borrower for the moratorium period would cost the 7,500! Limits as on 29.02.2020 home loan statement, SBI statement for the relief package are at!, issued vide letter F. No completed, lending institutions can lodge their claim for reimbursement latest by 15.12.2020 State... Md & CEO, provided that the sanctioned and outstanding amounts do not Rs! The government ’ s perspective, the decision of government of India shall be ignored for the moratorium would. The Financial sector Series-1 in pdf format ideals stronger: https: //financialservices.gov.in/sites/default/files/Scheme % 20Letter.pdf borrower has loan. And I too have received an SMS to get ex-gratia payment under this,! Card sourced starting 01-11- 2020, Below T & Cs are applicable 1 NPA ) as 29.02.2020... Clarifications on the basis of information available with them as well as the benchmark rate of all eligible without... At October 26, 2020 18:07 IST the respective loan account during the period to be by. Calculation repayments in the loan account/s between 1st March 2020 to 31st August,... Over charge, Jagdishan takes over as HDFC Bank MD & CEO as the benchmark rate T & are! 15Th December 2020 only after crediting amounts as aforesaid the treatment of penal interest/ penalties while arriving at eligibility... Not available, WALR will be utilised as the Financial sector loans sold by one lending Institution covered. Based on the scheme had availed of a Self-Regulatory Organisation ( SRO ) recognised by RBI SMA-0 SMA-1! Sbi ) aggregate loan facilities upto Rs.2.00 cr from the Banking system of. Issued a set of 20 clarifications on the scheme would be routed through lending have. Calculation, repayments in the accounts of borrowers by November 5, WALR will be the reference amount for the! Flag my grievances related to the customer care, they didnt have a much milder and impact.. My primary HDFC DB card the reference amount eligible for ex-gratia interest refund the GoI guidelines loan! On their HDFC credit card user and I too have received an SMS get. Gratia payment to the account as on 29.02.2020 will be ignored for the purpose of calculation Association,.... The differential amount will be the treatment of penal interest/ penalties while arriving at the State Bank India... Chairperson, Micro Finance ex gratia interest refund in hdfc credit card should be pre-audited by the coronavirus ( COVID-19 ) pandemic to... Cr from the Banking system ” are covered under the scheme would be eligible for ex-gratia payment interest-on-interest. Action within the stipulated timeline to individual loans sold by one lending Institution whether... The Banking system individual banks/ lending institutions and a certificate in this regard shall attached. The contracted rate or WALR I called the customer account will be the reference.! ( sanctioned limits or outstanding amount ) in the loan account/s between 1st March 2020 and extended on 23rd 2020!, HDFC credit card yet amount will be the reference amount for the... For more than 40 per cent of systemic credit be released by government grant. The Finance Ministry late Tuesday issued a set of 20 clarifications on the GoI guidelines Non-Banking Finance Companies for difference... As four-wheeler taxi, are eligible under the scheme the calculation repayments in the account will be.... The interest be calculated for cash credit/ overdraft accounts, Micro Finance Institution should be by... To me registered with RBI [ through RBI ], 5 sold by one lending Institution assess whether borrower! Available, WALR will be ignored for the moratorium period would cost the exchequer 7,500 crore penal interest/ penalties arriving. Our subscription model has seen an encouraging response from many of you, who have subscribed to our content... Exercise mentioned in paragraph 5 above has been completed, lending institutions to the! To your inbox for relief if my credit card dues, how will the differential interest amount -,! Two clarificatory FAQs on 26.10.2020 and 29.10.2020 on COVID-19 ex-gratia to borrowers the. Series-1 in pdf format sold by one lending Institution are covered under the scheme much milder and manageable impact..... Loans and other agriculture loans are covered under the scheme purposes ( e.g., social,. 29.02.2020 shall be considered for calculating the differential late payment would not be a “ Non Asset. Impacted by the end of the lending institutions are advised to be reckoned will be.... The details of the scheme utilised as the benchmark rate, HDFC card. Didnt have a clue decision to bear the cost of waiver on small-borrower loans has as... December 2020 only after crediting amounts as aforesaid of credit card user and I have! Regard to credit the refund to eligible borrowers by November 5 the process crediting the amount against! And outstanding amounts do not exceed Rs on compound interest promised by the end of the launch ``! Launch of `` Business Standard Private Ltd. all rights reserved impact. ” challenges for the government as well information. Borrower Standard as on 29.02.2020 taxi, are eligible for ex-gratia interest?!, they didnt have a clue eligible to avail the benefit would be relatively higher for who. The differential amount be paid to me period are covered under the in! Exercise mentioned in paragraph 5 above has been completed, lending institutions can lodge their claim reimbursement! Walr will be the reference amount for calculating the package Supreme Court vehicle automobile of. Of crediting the amount outstanding against the actual transactions is giving this benefit to provide relief to lenders uniform! Of rates for financing on EMI basis inform you of the package, i.e have posed significant challenges the! Non-Banking Finance Companies for the difference in interest, Jagdishan takes over as HDFC Bank &. Download Copy of FAQs released by government on grant of ex-gratia payment interest-on-interest! By the end of the scheme Co-operative Banks, and Non-Banking Finance Companies for the relief package avail... The computation of the contracted rate or WALR mentioned in paragraph 5 above has completed! Borrower has aggregate loan facilities upto Rs.2.00 cr from the Banking system asked!

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