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FAQs COVID 19 Ex Gratia to borrowers for difference in interest
FAQs COVID 19 Ex Gratia to borrowers for difference in interest
What is the ex gratia payment to the borrower under the scheme announced by GOI
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. 2 crores (aggregate of all the borrowings / facilities from all the banks and financial Institutions) for the period from 1st March 2020 to 31st August 2020 (6 months / 184 days).
What are the main features of the ex gratia to borrowers’ scheme?
The main features / highlights of the scheme are as under:
a. Loan accounts with sanctioned limits and outstanding not exceeding Rs.2 crores (aggregate of all facilities with all the lending institutions) as on 29.02.2020.
b. Loan accounts should be standard in the books of the lending institutions as on 29.02.2020.
c. The relief shall cover the following segments – MSME Loans, Education loans, Housing Loans, Consumer Durable Loans, Credit Card Dues, automobile loans, personal loans to professionals and Consumption loans.
d. The period reckoned for refund shall be from 1st March 2020 to 31st August 2020,
i.e. 6 months period / 184 days.
Do I have to apply for the relief?
No. The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply.
Whether Accounts categorized as SMA-0, SMA-1 and SMA-2 are eligible to avail the benefit of the package?
Yes, the accounts classified as SMA-0, SMA-1 and SMA-2 as on 29th Feb 2020 are eligible for the relief package.
Whether borrowers who have opted for deferment of Interest and Instalment under the RBI COVID 19 relief package earlier are eligible to avail the benefit under the above relief?
Yes. 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. No. BP.BC.47/21.04.048/2019-20 dated 27.03.2020 and extended on 23.05.2020.
Whether “partly disbursed loans” are covered under the relief package?
Yes, provided that the sanctioned and outstanding amounts do not exceed Rs. 2 Cr. The outstanding as on 29.02.2020 shall be the reference amount for calculating the differential interest amount.
Can a borrower who has closed the loan account/s between 1st March 2020 and 31st August 2020 avail the benefit of the scheme?
Yes. Such borrowers are eligible for refund of differential interest from 1st March 2020 upto the date of closure of account (not later than 31st August 2020).
In which of my accounts will the differential amount be credited?
The differential amount will be credited to the respective loan account(s).
Which Rate of Interest (%) shall be considered for calculating the package, i.e. RoI (%) considered at the time of sanction or RoI (%) as on 29.02.2020?
a. In respect of Education loans, Housing loans, Automobile loans, Personal loans to professionals and Consumption 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 applicable as on 29th February 2020.
b. 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. In case where no interest is being charged on equated monthly instalments for a specified period, for the purpose of relief, interest may be applied at MCLR/ Base rate as the case may be.
• In respect of term loans / Demand Loan, the rate of interest for the purpose of calculating the differential will be the contracted rate as specified in the loan agreements/ documentation applicable as on 29th February 2020.
• In respect of Cash Credit/ Overdraft, the rate of interest for the purpose of calculating the differential shall be the rate of interest prevailing as on 29.02.2020.
d. Credit Cards
• Eligibility: The Credit Card outstanding (i.e. settled amount) in the account as on 29.02.2020 will be the reference amount. Any debits / credits which are not reflected in the account will not be eligible/ will be excluded.
• 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
What will be the treatment for the repayments / credits made in term loan/ demand loan during the period from 1st March 2020 to 31st August 2020?
The outstanding as on 29.02.2020 will be the reference amount for calculating the differential. Any repayment / credits subsequent from 01.03.2020 – 31.08.2020 shall be ignored for the purpose of calculation.
How will the interest be calculated for cash credit/ overdraft accounts?
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. Compounding of interest shall be at monthly rests
How can I flag my grievances related to the relief package?
To register his/her grievance
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