covid relief to borrowers

RBI has vide its circular dated 26th October, 2020 announced a scheme of ex gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts. The scheme is as under:

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)

The Government of India has announced the 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) (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 interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions. The details of the Scheme are available at:

https://financialservices.gov.in/sites/default/files/Scheme%20Letter.pdf.

2. All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline.

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