NEW DELHI:Oct 24,2020: The finance ministry has issued guidelines for a scheme for grant of ex-gratia payment of difference between compound and simple interest to borrowers of specified loan accounts from March 1-August 31. The benefit will be routed through lending institutions, the ministry said in a circular addressed to banks and other lending institutions on Saturday.
The lender has to credit the amount to the account of the borrower on or before 5 November, giving relief to borrowers ahead of Diwali. Thereafter, lenders will have to claim reimbursement by 15 December.
The benefit will be extended for loans availed by micro, small and medium enterprises (MSMEs), education loans, housing, consumer durables, credit card dues, auto loans, personal and professional loans and consumption loans. The outstanding amount cannot exceed ₹2 crore, as on February 29, 2020. The loan should not be a non-performing asset as on 29 February.
The lending institution has to be either a banking company, or a public sector bank, co-operative bank or a regional rural bank, or All India Financial Institution, a non-banking financial institution, housing finance company or a micro finance institution.
The government will have to take a hit of ₹6,500 crore for the implementation of the scheme, a senior government official said.
