Big relief for borrowers, as Cabinet sanctions Rs 973 cr for loan moratorium

New Delhi: In a major relief for borrowers, especially of home loans, hit by the outbreak of Covid and the lockdown, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the payment of ex-gratia amount of Rs 973.74 crore to the SBI as reimbursement related to loan moratorium.
This is pertaining to remaining claims submitted by Lending Institutions (LIs) under 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 from March 1, 2020 to August 31, 2020, when India was hit hard by the pandemic, a Finance Ministry said.
As per the data available, about 1,612 LIs have 23,89,30,080 beneficiaries with a claim of Rs 6,473.74 crore, out of which Rs 5,500 crore have been disbursed earlier, and claims of Rs 973.74 crore was pending.
In the context of the Covid-19 pandemic, a scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts from March 1, 2020 to August 31, 2020 was approved by the Cabinet in October 2020, envisaging therein an outlay of Rs 5,500 crore. Budget allocation of Rs 5,500 crore was made for the scheme in FY 2020-2021. The amount of Rs 5,500 crore, as approved by the Cabinet, has been disbursed to SBI, the nodal agency under the scheme, for consequent reimbursement to lending institutions.
The SBI said that it received consolidated claims of Rs 6,473.74 crore approx from lending institutions. As Rs 5,500 crore has already been disbursed to SBI, approval of the Cabinet was being sought for a balance amount of Rs 973.74 crore, which has also been approved.
By granting ex-gratia payment of difference between compound interest and simple interest during the six month moratorium period to distressed/vulnerable category of borrowers, irrespective of whether the borrower had availed of moratorium or not, the scheme would equitably help small borrowers bear the stress on account of the pandemic and get back on their feet, the Finance Ministry said.
(IANS)