New Delhi: Your Diwali celebrations would have added joy this time around if you are one of the borrowers and are looking forward to the EMI repayment program.
Banks began to credit the difference between compound interest and simple interest to borrowers’ account for specified loan accounts during the moratorium period.
Want to check if you received EMI cashback or not?
The PTI news agency reported that some banks have started the repayment process. âDear customer, credited the COVID-19 relief courtesy ofâ¦ Nov. 3 to your account,â PTI said citing a message from a public sector bank to a customer.
So if you haven’t received an SMS, you can check your bank statement to see if the money has been credited to your account or not.
Ex gratia payment or interest waiver on interest
Last week, the Reserve Bank asked all lending institutions, including non-bank financial corporations, to implement the waiver of interest on loan interest up to Rs 2 crore for the six-month moratorium period. months starting March 1, 2020.
On October 23, the government announced a program to provide an ex gratia payment of the difference between compound interest and simple interest for six months to borrowers on specified loan accounts. The scheme imposes an ex gratia payment to certain categories of borrowers by crediting the difference between simple interest and compound interest for the period from March 1, 2020 to August 31, 2020 by the respective credit institutions.
The government had asked credit institutions to complete the exercise of crediting the amount in the accounts of borrowers by November 5. Home loans, education loans, credit card contributions, car loans, MSME loans, durable consumer loans and consumer loans are covered by the scheme.
In accordance with the scheme, credit institutions must credit the difference between compound interest and simple interest in respect of eligible borrowers to respective accounts for said period, whether the borrower has fully or partially benefited from the moratorium on the repayment of the loan. loan announced by the RBI. March 27, 2020.
After crediting the said amount to the respective accounts of the eligible borrowers, the lending institutions would claim reimbursement from the central government through the nodal agency of the State Bank of India as stipulated in the program, an affidavid from the State Bank of India said. Center.
Who is eligible for the interest on interest exemption?
Posting other frequently asked questions (FAQs) about the program, the finance ministry said on Wednesday that consumer loans, including those backed by gold as collateral, are eligible for the waiver. This is the second additional FAQ published by the ministry and comes just one day before the last program implementation date. However, loans against term deposits [including Foreign Currency Non-Resident (Bank) FCNR(B) account, bonds and other interest bearing instruments], and stocks, etc., and loans granted for investment in financial assets (including stocks, bonds, etc.) are not eligible for coverage under the scheme.
Understanding the Loan Moratorium
Following the coronavirus pandemic in the country, the Reserve Bank of India announced in March a moratorium on reimbursement of IMEs and credit card dues for three months. The central bank subsequently extended the moratorium period until August 31. In accordance with the eligibility criteria mentioned in the guidelines, the accounts should be standard as of February 29, which means that it should not be a non-performing asset (NPA).