The Union Cabinet on Wednesday has approved the payment of ex-gratia amount of Rs 973.74 crores—the last leg of payment pending of the interest given to the Lending Institutions during six month moratorium period during Covid-19 pandemic first wave.
The government has already disbursed Rs 5,500 crores to 1612 leading financial institutions benefitting more than 2.38 crore beneficiaries, who had taken loans from these financial institutions.
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 31 August 2020 was approved by the Cabinet in October 2020. Though government has already given Rs 5500 crore, the Lending Institutions have further claimed Rs 973.74 crore more under the scheme, said a senior officer of the Finance Ministry.
“By granting ex-gratia payment of difference between compound interest and simple interest during the six month moratorium period to distressed 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 Ministry said.
Operational guidelines for the scheme are already issued with the approval of the Cabinet. The said amount of Rs. 973.74 crore will be disbursed in accordance with the said operational guidelines, the Ministry said.