MUMBAI: In the next few days, banks will credit billions of loan accounts with an ex gratia payment equal to the interest on the amount of interest they have paid at closing. The Banking Association of India has said that the government’s decision to apply a uniform formula for all borrowers below Rs 2 crore will allow them to automate payments within the government deadline of November 5, 2020.
“This is a very simple scheme. the Outstanding balance it has crystallized on February 29. Furthermore, any recovery by the bank during the moratorium period is ignored. A borrower who has paid all the installments will obtain the same benefit as those who have taken advantage of the moratorium. The calculations will not take time as they will be software driven. However, eligible clients will have to be certified by auditors (that the loans are eligible) ”, Rajkiran Rai, President of the IBA and Executive Director of Union Bank of India, He said.
TOI had reported in its Saturday edition exclusively on the completion of the government’s plan.
Banks are expected to establish a portal on their website to resolve any complaints related to ex gratia. Meanwhile, they will continue to charge interest in the usual way. The ex gratia payment credited to the customer account will be the relief on compound interest promised by the Center to the Supreme Court. Earlier this month, in regards to interest relief for borrowers during the moratorium, the Center had promised to offset interest on interest.
The promise was followed by a communication on Friday to all RBI-regulated lenders announcing the scheme in which the government would compensate banks for crediting clients’ accounts with an ex gratia amount equal to interest on loans during the period. blocking.
The government is expected to return with clarification on the eligibility of pending credit card payments as of February 29, and whether the ex-gratia credit card will be available in the pending payment on that date or in the amount transferred. Another problem relates to accounts in which the loan tenure was completed midway through closing and the borrower was no longer in the bank.
Out of the Rs 100 lakh crore of outstanding loans, eligible loans are expected to be in the range of Rs 30-40 lakh crore. Assuming a rate of 8%, the interest on the loans would be roughly 5,000 to 6,500 crore.
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