Interest relief under Ex-Gratia scheme
Following channels are available for raising your queries/ complaints regarding relief extended under scheme for grant of Ex-Gratia payment of difference between compound interest and simple interest.
- Email: [email protected]
- Phone No: 1800 1200 1200
- Grievance form submission at nearest branch
In case of non-resolution of grievances within seven days, customers may escalate their grievance to the Regional Nodal Officer(s) # and thereafter to the Principal Nodal Officer# after expiry of further seven days.
Frequently Asked Questions:
1. What is the Ex gratia Scheme?
As per this scheme banks shall credit the difference between simple interest and compound interest for a period between 1st March 2020 to 31st Aug 2020 in specified loan accounts of eligible borrowers.
2. What is the time-period for credit/payment of ex-gratia amount by the lender?
The scheme provides that the exercise of crediting the amount under the scheme shall be completed by respective lending institutions on or before 05th November 2020. Therefore, the amount under this Ex-gratia scheme must be credited to the borrower’s account by the Bank within the stipulated time.
3. Which all borrowers are eligible to be benefitted under the Scheme?
The borrowers falling under any or more than one of the specified loan accounts are eligible under Ex- gratia Scheme “Eligible Borrower”. However additional conditions and stipulations need to be complied as laid below:
- Such borrower should not have, sanctioned limit and the outstanding amount exceeding Rupees 2 crores in aggregate with all the lending institutions as on Feb 29, 2020. That is the sum of all the borrowings of such a borrower in specified loan accounts and all the other categories of loans should have, both sanctioned limits as well outstanding loan amounts less than 2 crores.
- Such an eligible category loan account should be standard (less than 90 DPD) as on Feb 29, 2020.
- Whether such borrower availed complete moratorium, partial moratorium, or did not avail any moratorium benefit in respect of such eligible category loan account is irrelevant for the purpose of extending benefit under the Ex-gratia Scheme.
4. Will Non-Fund Based Limits as on Feb 29, 2020 be included for arriving at the eligibility amount of up to Rs.2 crore?
Non-fund based limits will not be included for arriving at the eligibility.
5. Whether “partly disbursed loans” are covered under the relief package?
Yes, provided that the sanctioned and outstanding amounts do not exceed Rs. 2 Cr.
The outstanding as on 29.02.2020 shall be the reference amount for calculating the differential interest amount.
6. If I have already closed my loan account after Mar 01, 2020 how will the differential amount be paid to me?
It will be credited to your savings/ current account and if you do not maintain any such account with lending institution, you can advise the Bank the details of the account in other banks where the amount can be credited /remitted to.
7. Will the eligibility be determined as on the date of this scheme or as on Feb 29, 2020?
The borrower account must fall in the category of specified loan account as on 29th Feb 2020. For example, a loan account was classified as an MSME as on 29th Feb 2020 and later on a subsequent change in definition has moved it out of the category of MSME, the benefit under the scheme shall still be given to the said borrower account, subject to fulfilment of the eligibility conditions.
8. Does this Ex-gratia Scheme mean that no-interest will be charged by the banks for the period of Mar 1, 2020 till Aug 31, 2020 on eligible loan accounts?
No, this Ex-gratia scheme is in the form of grant of interest on interest in the specified loan account category, irrespective of whether moratorium benefit was extended/availed completely, partially or not availed at all on such loan accounts.
Therefore, all the eligible borrowers in specified loan accounts will receive payment under the Scheme from the bank. The credit amount would be such part of interest which would have been chargeable by the Bank on the accrued interest component during the six months deferment period from 29th Feb 2020 till 31st Aug 2020. That is the difference between the Compound interest and Simple Interest on the outstanding amount will be payable by the lending institution which shall be reimbursed to them by the Government.
Illustration:
The outstanding amount in a specified loan account as on 29th Feb 2020 is Rs. 1,00,000 (Rs. One Lakhs Only). The borrower paid the all the dues towards the loan amount by 30th April 2020. Customer Account matured on 31st May 2020. The contracted annualized rate compounded monthly as on 29th Feb 2020 is at 10%.
|
Since the monthly resets are to be taken under the Scheme guidelines, Compound interest on outstanding amount as on 29.02.2020 will be calculated as below:
|
Month
|
Principal
|
Rate
|
Days
|
Interest
|
Formula
|
|
March
|
1,00,000.00
|
10%
|
31
|
849.32
|
Principal*Interest rate/365*Days
|
|
April
|
1,00,849.32
|
10%
|
30
|
828.90
|
Principal*Interest rate/365*Days
|
|
May
|
1,01,678.21
|
10%
|
31
|
863.57
|
Principal*Interest rate/365*Days
|
|
|
Total
|
|
|
2,541.78
|
|
|
Simple Interest on outstanding amount as on 29.02.2020 will be calculated as below:
|
Month
|
Principal
|
Rate
|
Days
|
Interest
|
Formula
|
|
March
|
1,00,000.00
|
10%
|
31
|
849.32
|
Principal*Interest rate/365*Days
|
|
April
|
1,00,000.00
|
10%
|
30
|
821.92
|
Principal*Interest rate/365*Days
|
|
May
|
1,00,000.00
|
10%
|
31
|
849.32
|
Principal*Interest rate/365*Days
|
|
|
Total
|
|
|
2,520.55
|
|
|
Therefore, the balance Rs. 21.23/- shall be credited to the specified account of the borrower by the lending institution.
-
Will crediting the amount to the account of the borrower mean upfront payment or adjustment with the outstanding liability?
To credit the amount to the account of the borrower the bank may either adjust the same as below:
- First Outstanding EMI
- Secondly, outstanding balance (POS) or
- In closed loans, Amount will be paid to the borrower the sum of money electronically in the same account from which repayment of the loan was done.
-
A borrower loan account has been closed in the books of the bank as on Apr 30, 2020. However, the borrower was eligible under the scheme as on Feb 29, 2020. Will the borrower receive any benefit under the Scheme?
Since the eligibility is to be determined as on 29th Feb 2020, the fact that the loan account has been closed should not deprive the borrower of the benefit under the Scheme.
Illustration
The outstanding amount in a specified loan account as on 29th Feb 2020 is Rs. 1,00,000 (Rs. One Lakhs Only). The borrower paid the all the dues towards the loan amount by 30th April 2020. The contracted annualized rate compounded monthly as on 29th Feb 2020 is at 10%.
Since the account was closed on 30 April 2020, therefore no. of months shall be 2(two) months., Compound interest on outstanding amount as on 29.02.2020 will be calculated as below:
|
Month
|
Principal
|
Rate
|
Days
|
Interest
|
Formula
|
|
March
|
1,00,000.00
|
10%
|
31
|
849.32
|
Principal*Interest rate/365*Days
|
|
April
|
1,00,000.00
|
10%
|
30
|
821.92
|
Principal*Interest rate/365*Days
|
|
|
Total
|
|
|
1,671.23
|
|
|
Simple Interest on outstanding amount as on 29.02.2020 will be calculated as below
|
Month
|
Principal
|
Rate
|
Days
|
Interest
|
Formula
|
|
March
|
1,00,000.00
|
10%
|
31
|
849.32
|
Principal*Interest rate/365*Days
|
|
April
|
1,00,849.32
|
10%
|
30
|
828.90
|
Principal*Interest rate/365*Days
|
|
|
Total
|
|
|
1,678.21
|
|
|
Therefore, the borrower shall be entitled to Rs. 6.98 under the ex-gratia scheme.
11. A borrower satisfies all other conditions but is classified as NPA as on Feb 29, 2020 and subsequently becomes standard. Will the borrower be eligible under the Scheme?
The subsequent movement of the NPA to standard will not make the account eligible under the scheme. As per the eligibility conditions, the loan account must be classified as standard as on 29th Feb 2020.
&12. A borrower account was standard as on Feb 29, 2020 and also satisfies all the other eligibility conditions under the scheme, but as on date is an NPA. Can the benefit still be availed?
Yes, the benefit shall still be given to the borrower based on the fact that the loan account was eligible as on 29/02/2020.
13. A borrower has not availed the deferment benefit under the moratorium Scheme. Will such a borrower be eligible under the ex-gratia Scheme?
Yes, the Ex-gratia Scheme clearly specifies that all the eligible loan accounts, whether moratorium benefit is completely availed, or partially availed, or not have been availed at all shall be eligible for ex-gratia payment under the scheme.
All the payments made by such a borrower towards its eligible loan account between 01 Mar 2020 and 31 Aug 2020 will be ignored. To uniformity, the difference between compound interest and simple interest is to be reckoned at an outstanding amount as on 29 Feb 2020 for a period of six months.
14. Will it be right to say that all specified accounts of eligible borrowers are entitled for Ex-gratia payment under the scheme, irrespective of whether payment deferment have been availed or not under the moratorium scheme?
Yes, all the specified loan accounts of eligible borrowers are entitled to ex gratia payment under the Ex-gratia scheme.
15. Is there any requirement for eligible borrowers under specified loan accounts which needs to be fulfilled for the purpose of availing ex-gratia payment benefit?
No, as per the ex-gratia scheme guidelines all lending institutions under the scheme have to credit the difference between compound interest and simple interest in specified loan accounts of the eligible borrowers.
However, it is always prudent on part of borrowers and the Bank to exchange confirmation about the credit of such payment under the scheme.
16. What is the Grievance Redressal mechanism of AU Small Finance Bank?
Following channels are available for raising your queries/ complaints regarding relief extended under scheme for grant of Ex-Gratia payment of difference between compound interest and simple interest.
• Call us @ 1800 1200 1200
In case of non-resolution of grievances within seven days, customers may escalate their grievance to the Regional Nodal Officer(s) and thereafter to the Principal Nodal Officer after expiry of further seven days.
17. What are the remedies of a borrower, whose lending institution is not extending the payment benefit under the ex-gratia scheme?
As under the scheme operational guidelines, each lending institution shall put in place a grievance redressal mechanism for eligible borrowers within one week from date of issuance of ex-gratia guidelines i.e. latest by 29/10/2020. to be added that how customer can contact bank & what is the TAT.
18. What are the remedies of a bank, having grievances concerning the Scheme?
Grievances of bank shall be resolved through designated cell at State Bank of India (SBI) in consultation with the Ministry of Finance, Government of India. However, in respect to the issues/queries related to interpretation of scheme, the decision of Government of India shall be final.
19. 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 Feb 29, 2020. Compounding of interest shall be at monthly rests.
20. A salaried employee / self-employed professional had availed of a personal loan from bank which has some amount outstanding as on Feb 29, 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.
