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Frequently Asked Questions (FAQs)

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 (01-03-2020 to 31-08-2020) (the ‘Scheme’) on 23-10-2020, 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 01-03-2020 to 31-08-2020 by respective lending institutions.

 

RBI vide its guideline dated 26-10-2020 has advised all lending institutions to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline.

 

In accordance with the said guidelines, the Bank is taking necessary steps to provide you the benefit under this scheme.

 

Please find below a set of Frequently Asked Questions pertaining to the scheme:

 

FAQs

1. What is the ex-gratia payment to the borrower under the scheme announced by the Government of India (GOI)?

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 up to INR 2 crores (aggregate of all the borrowings / facilities from all the banks and financial Institutions) for the period from 01-03-2020 to 31-08-2020 (6 months / 184 days).

2. What are the main features of the ex-gratia to borrowers scheme?

The main features / highlights of the scheme are as under:

a. Loan accounts with sanctioned limits and outstanding not exceeding INR.2 crores (aggregate of all facilities with all the lending institutions) as on 29-.02-.2020.

b. Loan accounts should be standard in the books of the lending institutions as on 29-02-2020.

c. The relief shall cover the following segments – MSME Loans, Education loans, Housing Loans, Consumer Durable Loans, Credit Card Dues, Automobile loans, Personal loans to Professionals and Consumption loans.

d. The period reckoned for refund shall be from 01-03-2020 to 31-08-2020, i.e. 6 months period / 184 days.

3. Do I have to apply for the relief?

No. The ex-gratia relief will be credited to the account of all eligible borrowers without any requirement to apply.

4. Who will finalise the list of eligible accounts?

Individual banks / lending institutions will finalise the list of eligible borrowers for the relief based on the GOI guidelines.

5. How will the lending institutions assess whether a borrower has aggregate loan facilities up to -.INR 2cr from the banking system?
Lending institutions are to assess this on the basis of information available with them as well as information accessible from credit bureaus.
6. Will my Non Fund Based Limits as on 29-02-2020 be included for arriving at the eligibility amount of up to INR.2 crore?
No. Non fund based limits will not be included for arriving at the eligibility.
7. Whether Accounts categorised as SMA-0, SMA-1 and SMA-2 are eligible to avail the benefit of the package?
Yes, the accounts classified as SMA-0, SMA-1 and SMA-2 as on 29-02-2020 are eligible for the relief package.
8. Are NPA accounts eligible for the relief package?

No. The loan should not be a “Non-Performing Asset” (NPA) as on 29-02-2020.

9. Whether borrowers who have opted for deferment of Interest and Instalment under the RBI COVID 19 relief package earlier are eligible to avail the benefit under the above relief?

Yes. The package will be available for eligible borrowers irrespective of whether they have availed or partially availed or not availed the moratorium on repayment announced by RBI vide DOR. No. BP.BC.47/21.04.048/2019-20 dated 27-03-2020 and extended on 23-05-2020.

10. Whether “partly disbursed loans” are covered under the relief package?
Yes, provided that the sanctioned and outstanding amounts do not exceed INR 2 Cr. The outstanding as on 29-02-2020 shall be the reference amount for calculating the differential interest amount.
11. Can a borrower who has closed the loan account/s between 01-03-2020 and 31-08-2020 avail the benefit of the scheme?
Yes. Such borrowers are eligible for refund of differential interest from 01-03-2020 up to the date of closure of account (not later than 31-08-2020).
12. In which of my accounts will the differential amount be credited?
The differential amount will be credited to the respective loan account(s).
13. By when would the Bank credit the amount of differential interest?  
The Bank will credit the amount of differential interest to your respective loan accounts(s) by 05-11-2020.
14. How will I get to know the benefit amount and if I have got the benefit under the scheme or not?
Upon credit of the differential amount to the respective loan account(s), the Bank will notify the same to you vide an sms as well as an e-mail to your registered mobile number and e-mail id respectively.
15. If I have already closed my loan account after 01-03-2020, how will the differential amount be paid to me?
It will be credited to your savings / current account through which the repayments were being made.
16. Which Rate of Interest (%) shall be considered for calculating the package, i.e. RoI (%) considered at the time of sanction or RoI (%) as on 29-02-2020?
a. In respect of Education loans, Housing loans, Automobile loans, Personal loans to professionals and Consumption loans, the rate of interest to be applied for calculating the differential interest component shall be the contracted rate as specified in loan agreements / documentation applicable as on 29-02-2020.

b. MSME:
In respect of term loans / Demand Loan, the rate of interest for the purpose of calculating the differential will be the contracted rate as specified in the loan agreements / documentation applicable as on 29-02-2020.
In respect of Cash Credit / Overdraft, the rate of interest for the purpose of calculating the differential shall be the rate of interest prevailing as on 29-02-2020.

c. Credit Cards:
Eligibility: The Credit Card outstanding (i.e. settled amount) in the account as on 29-02-2020. will be the reference amount. Any debits / credits which are not reflected in the account will not be eligible / will be excluded.
RoI (%): The rate of interest shall be the Weighted Average Lending Rate (WALR) charged by the card issuers for transactions financed on EMI basis from its customers during the period from 01-03-2020 to 31-08-2020.
17. Will I be eligible for relief if my credit card balance is in “Credit” as on 29-02-2020?
No. Ex-gratia will not be paid on those credit cards where balance is in “credit” as on 29-02-2020.
18. What will be the treatment of penal interest/ penalties while arriving at the rate of interest?
The contracted rate / interest rate prevailing as on 29-02-2020 which is considered for calculating the interest differential will exclude any penalties or any penal rate of interest applied in the account.
19. What will be the treatment for the repayments / credits made in term loan / demand loan during the period from 01-03-2020 to 31-08-2020?
The outstanding as on 29-02-2020will be the reference amount for calculating the differential. Any repayment / credits subsequent from - 01-03-2020 to 31-08-2020 shall be ignored for the purpose of calculation.
20. How will the interest be calculated for cash credit / overdraft accounts?
Simple interest for the period will be calculated based on daily outstanding as at end of the day at rate of interest prevailing as on 29-02-2020 compounding of interest shall be at monthly rests.
21. How can I flag my grievances related to the relief package?
Retail borrowers may register your grievances/queries at our dedicated Customer care number 1860-419-5555 / 1860-500-5555 (call charges apply) from 8 am to 8 pm on all days except Sundays and National holidays.

Non-retail borrowers (corporate borrowers) may reach out to your relationship manager for any queries/clarification.

You may also raise your concerns online by clicking here.
22. A salaried employee / self-employed professional had availed of a personal loan from bank which has some amount outstanding as on 29-02-2020. Is the loan eligible for ex-gratia payment under the scheme?

Yes. Loans for consumption purposes (e.g., social ceremonies, etc.) 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. However, loans against fixed deposits [including Foreign Currency Non-Resident (Bank) {(FCNR(B)} account, bonds and other interest bearing instruments], and shares etc., and loans given for investment in financial assets (shares, debentures etc.) are not eligible for coverage under the scheme.

23. I hold multiple loans/credit facility (ies) with the bank. Will I get benefit for each of these loans /facility (ies)?

Loan accounts having sanctioned limits and outstanding amount of not exceeding INR. 2 crore [aggregate of all facilities with lending institutions] as on 29-02-2020 will be eligible under the scheme.