Big relief for borrowers as Cabinet sanctions Rs 973 cr for loan moratorium – The New Indian Express
NEW DELHI: In major relief for borrowers, especially home loans, affected by the Covid outbreak and the lockdown, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the payment of an ex gratia amount of Rs 973.74 crore to the SBI as repayment related to the loan moratorium.
This relates to the remaining claims submitted by lending institutions (LIs) under the program to grant ex gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts of the March 1, 2020 to August 31, 2020, when India was hit hard by the pandemic, a finance ministry said.
According to available data, about 1,612 LI have 23, 89, 30,080 beneficiaries with claim of Rs 6,473.74 crore, of which Rs 5,500 crore was disbursed earlier, and claims of Rs 973.74 crore were in waiting.
In the context of the Covid-19 pandemic, a scheme for granting ex gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts from March 1, 2020 to August 31 2020 was approved by the Cabinet in October 2020, considering an expenditure of Rs 5,500 crore therein. A budget allocation of Rs 5,500 crore has been made for the program in the financial year 2020-2021. The amount of Rs 5,500 crore, as approved by the Cabinet, was paid to SBI, the nodal agency of the scheme, for consequent reimbursement to lending institutions.
The SBI said it received consolidated claims of about Rs 6,473.74 crore from lending institutions. As Rs 5,500 crore has already been paid to the SBI, Cabinet approval was sought for a balance of Rs 973.74 crore, which was also approved.
By granting ex gratia payment of the difference between compound interest and simple interest during the six-month moratorium period to the distressed/vulnerable category of borrowers, whether or not the borrower benefited from the moratorium, the scheme would fairly help small borrowers cope with the stress of the pandemic and get back on their feet, the finance ministry said.