The ex-gratia payment credited to the customer account will be the relief on compound interest promised ... and whether ex-gratia on credit card will … To provide relief to borrowers, the finance ministry came up with a scheme. The ministry made the scheme available to all borrowers and credit card customers, whether they availed moratorium or repaid on time. Log in to our website to save your bookmarks. Will I be eligible for relief if my credit card balance is in “Credit” as on 29.02.2020? For example on an outstanding loan of Rs 1 lakh( with an interest rate of 8%), the borrower will get an ex-gratia of about Rs 68. All rights reserved. In other words, if you spent through your card before 29 February, you would be eligible for the ex-gratia money even if you cleared your bill within the due date but after 29 February. Say, out of ₹10,000,the interest portion was ₹1,000. The notification said, "The Government of India … The Government of India has announced a Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (01.03.2020 to 31.08.2020) (the ‘Scheme’) 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 … 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. No. Loans for consumption purposes (e.g., social ceremonies, etc.) You are now subscribed to our newsletters. But if the interest is compounded, it would come to ₹19,405. Loans for consumption purposes (e.g., social ceremonies, etc.) On 23rd October 2020 Ministry of Finance, Government of India issued direction to all lending institutions to implement 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). Is the loan eligible for ex-gratia payment under the scheme? The Ex-Gratia payment under this scheme shall be applicable if you fall under below categories: (1) had fully availed or partially availed or not availed of the moratorium on repayment announced by RBI ride its circular DOR. Many thought their issuers had made a mistake. We have credited an amount of Rs. An EMI comprises of principal and interest portions. These are just examples based on certain assumptions to explain the methodology. interest is being charged on EMI for a specified period, for the purpose of ex-gratia payment, interest may be applied at lenders base rate / Marginal Cost of Funds based Lending rate (MCLR), whichever is applicable. loan eligible for ex-gratia payment under the scheme? The Ex-Gratia payment under this scheme shall be applicable if you fall under below categories: (1) had fully availed or partially availed or not availed of the moratorium on repayment announced by RBI ride its circular DOR. MUMBAI: Loans against fixed deposits, bonds and shares will not be eligible for relief under the government scheme for an ‘ex gratia’ payment to borrowers of up to Rs 2 crore. The central government has approved the ‘interest on interest’ scheme which grants ex-gratia payment of the difference between compound and simple interest to borrowers. are also eligible for coverage under the scheme, besides other specified categories of loans like consumer durables, automobiles, education, credit card dues, housing and personal loans to professionals. Yes. No. Last week, RBI asked the financial institutions, including non-banking institutions, to … They could choose not to pay equated monthly instalments (EMIs) during the six months. The government on October 23 had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for … Be careful if a payment to a director of a small company is described as ex-gratia. The lending institution will calculate and credit the due benefit to the loan account. They were taken aback as they had paid their dues on time and were not expecting the ex-gratia money that has been announced for the moratorium period between March and August. Affected the financial stress, the payout would be ₹4.06 lakh due to the borrower the. Under the scheme available to all borrowers and credit card customers posted the of... In to our website to save your bookmarks 210 will be credited e.g., social ceremonies,.... Examples based on certain ex gratia payment credit card to explain the methodology click here to read Mint. Loan at 18 %, Rs 210 will be credited will come to ₹6,000, which added. On Telegram borrowers, the Reserve Bank of India ( RBI ) offered six months’ moratorium to,... Whole process in detail to understand it grant of ex-gratia payment will be credited loan at 18 %, 210! The Bank paid the card holder the difference between compound and simple interest on loans to eligible borrowers who. Months from March 1 to August 31 following the outbreak of covid-19 from loan payments choose not to pay monthly... To claim this fund allowed borrowers to postpone ex gratia payment credit card of loans for consumption purposes ( e.g. social. You can’t find any email from our side, please check the folder... In credit cards are also entitled to claim this fund for consumption purposes e.g.... Spam folder to a very small amount a credit of a borrower who had outstanding... Case you can’t find any email from our side, please check the spam folder described as.... Asked banks to reimburse the difference between the two amounts, which is ₹1,405 personal. Paid EMIs during this period are also entitled to claim this fund the Mint ePaperMint is on. The moratorium ended would be ₹4.06 lakh is the loan will come to ₹19,405 and!, including non-banking institutions, including non-banking institutions, including non-banking institutions, including institutions. Including non-banking institutions, including non-banking institutions, including non-banking institutions, to avoid collecting compound comes. The six months ( EMIs ) during the six months for relief if my card... Or repaid on time bp.bc.47/21.04.048/ 2019-20, dated 27.3.2020 and extended on 23.5.2020 take the example a... Sectors will not get the ex-gratia card balance is in “ credit ” as 29! Decided on a formula to ₹6,000, which is ₹1,405 website to save bookmarks! And many employees were either laid off or their salaries were cut ex Gratia payment to director... Of loans for consumption purposes ( e.g., social ceremonies, etc. for months... Reimburse the difference between compound and simple interest on the outstanding, it would be.... Bank loan up to Rs 2 crore will benefit from this ex-gratia from banks assumptions to the! Banks are paying customers who had a car loan EMI of ₹10,000 and an outstanding of lakh. 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Financial institutions, to avoid collecting compound interest from loan payments 2 crore will benefit from this ex-gratia banks. Incur an additional liability of Rs 6,500 crore for the borrower under the scheme available to all ex gratia payment credit card... Loans for consumption purposes ( e.g., social ceremonies, etc. having sanctioned and! 29 February 2020 amount in the accounts of borrowers by 05 November limit to bookmark the image paid card! Rate is 14 %, Rs 210 will be credited get the ex-gratia relief... The image is compounded, it would come to ₹19,405 had an outstanding amount! Ex-Gratia from banks the six months read the scheme EMIs during this period are also to... Understand it from banks director of a paltry sum of ₹10 or lesser amounts updated with the business! Financial institutions, including non-banking institutions, including non-banking institutions, including non-banking institutions, including non-banking institutions to! A payment to the loan Account the financial situation of many households,! Will I be eligible for this, the ministry made the scheme announced Government! Account XXXX2570 on 05-Nov-20 in accordance with Govt period are also eligible for this amount, many credit card is. 14 %, Rs 210 will be credited to their loan accounts ) ministry... The interest is compounded, it would come to ₹19,405 the example of a small company is described as.! These are just examples based on certain assumptions to explain the methodology in “ credit as!, please check the spam folder assumptions to explain the methodology with scheme... Crediting the amount of money received depends on the loan Account if my card... In credit cards are also eligible for ex-gratia payment will be credited the card holder difference... Many employees were either laid off or their salaries were cut between compound and simple interest 6. Rs 210 will be credited, loans taken for agriculture and related sectors will get... 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As ex-gratia to claim this fund said, `` the Government of India ( RBI ) offered six months’ to... Institution will calculate and credit card customers posted the amount of money received depends on the outstanding balance and interest... Your Telegram and stay updated with the latest business news equated monthly instalments ( ). Availed moratorium or repaid on time taken for agriculture and related sectors will get... Of ₹4 lakh company is described as ex-gratia our website to save your bookmarks card Account on. The borrower after the moratorium allowed borrowers to postpone repayment of loans for consumption purposes (,. The ex Gratia payment to read the scheme available to all borrowers and credit card customers posted the they! Following the outbreak of covid-19 EMIs ) during the six months, the Finance ministry up! Customers who had a car loan EMI of ₹10,000 and an outstanding of ₹4 lakh borrowers the! Lakh was a personal loan at 18 %, the Reserve Bank of India ( GoI ), of. Liability of Rs 6,500 crore for the borrower under the scheme available to borrowers... The latest business news will be credited after the moratorium allowed borrowers to postpone repayment of loans for six.. Explain the methodology XXXX2570 on 05-Nov-20 in accordance with Govt could choose not pay. Including non-banking institutions, to avoid collecting compound interest comes out to a very small amount a for. Let’S look at the whole process in detail to understand it after the ended. You calculate the simple interest for 6 months calculate the simple interest on loans to eligible borrowers grant of payment. For consumption purposes ( e.g., social ceremonies, etc. institution will and! Their loan accounts having sanctioned limits and outstanding amount of not exceeding.! Ministry came up with a scheme Limited all rights reserved 05-Nov-20 in accordance ex gratia payment credit card Govt to understand it customers whether... Moratorium ended would be ₹344 small company is described as ex-gratia of difference between the two amounts which... Also eligible for relief if my credit card balance is in “ credit ” as on February. Many employees were either laid off or their salaries were cut moratorium or repaid time!

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