Online Procedure to Apply RBI Ex Gratia Payment Scheme 2020, Eligibility, Date, Interest Calculation
Considering the Covid 19 Pandemic, the Reserve Bank of India has initiated the Ex Gratia Payment Scheme. 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 2020 to borrowers in specified loan accounts. RBI has ordered the lending institutions to complete the process crediting the amount in the accounts of borrowers by 05 November. Moreover, the RBI has issued a letter to all the banks and financial institutions on 26 October 2020.
The applicants can apply online for the RBI Ex Gratia Payment Scheme by visiting the official portal of the scheme.
RBI Ex Gratia Payment Scheme (Loan)
This article explains the Online procedure to apply for the RBI Ex Gratia Scheme, Eligibility, Date, and Interest Calculation on the official website.
Eligibility and Dates of Reserve Bank of India Ex Gratia Scheme
Find out the eligibility criteria for applying the RBI Ex Gratia Scheme, as shown below.
- The borrower’s loan accounts having sanctioned limits and outstanding amount of not exceeding Rupees 2 Crores (aggregate of all facilities with lending institutions) as on 29 February 2020.
- The loan account should be standard as on 29 February 2020( the loan should not be a Non-Performing Asset).
- The eligibility is only applicable for following segments and classes of loans such as MSME Loans, Education Loans, Housing Loans, Consumer Durable Loans, Credit Card Dues, Automobile Loans, Consumption Loans and Personal Loans to Professionals.
- The Rate of Interest would be prevailing on 29 February 2020, i.e., in case the Rate of Interest has changed, after that it shall not be reckoned for computation.
- The payable ex-gratia amount shall have to be credited to the account of the borrower by the respective lending institutions as ex-gratia payment under the scheme.
Interest Calculation for Covid 19 RBI Ex Gratia Scheme
Find out the Interest Calculation for RBI Ex Gratia Scheme for different segments of loans.
- For loans such as Education, Automobile, Housing, Personal, Professional and Consumptions Loans the Rate of Interest is calculated as the difference between simple and compound Interest shall be the contracted rate as mentioned in the loan agreement and documentation.
- For Consumer durable loans, the Rate of Interest to be applied for calculating the difference between the simple and compound interest shall be contracted rate as specified in the loan agreement.
- In cases where no interest is being charged on Equated Monthly Instalments (EMI) for a specified period, for ex-gratia payment, interest may be applied at the lender’s base rate / Marginal Cost of Funds based Lending Rate (MCLR) whichever is applicable.
- For Credit Card dues, the Rate of Interest shall be the Weighted Average Lending Rate (WALR) charged by the card issuer for transactions financed on EMI basis from its customers during the period from 01 March 2020 to 31 August 2020.
Let us see the Mode of Calculation of Simple and Compound Interest.
- 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 or an Overdraft facility, 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.
- While making the calculation, repayments in the loan account during the period to be reckoned will be ignored. This will make the approach of the lending institutions 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. As a uniform rate is not available, WALR will be utilised as the benchmark rate.
Apply Online for RBI Ex Gratia Scheme (Loan) 2020
- According to the information sources, there is no online application procedure for the Ex Gratia scheme, as the amount will be directly credited to the bank accounts of the borrowers based on the GOI guidelines.
Covid 19 RBI Ex Gratia Payment Scheme FAQ’s
Should the applicants apply online for the recently announced RBI Ex Gratia Scheme?
According to the official sources, there is no application procedure for the scheme and the amount will be directly credited to accounts of borrowers.
What is the recently announced RBI Ex Payment Scheme?
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 2020 to borrowers in specified loan accounts.
What is the maximum limit of the borrowings under the RBI Ex Gratia Payment Scheme 2020?
The maximum limit of borrowings under this scheme is 2 Crores.
The Individual banks or lending institutions will finalize the list of the eligible borrower for the relief based on the GOI guidelines.