• The Period to be considered for crediting of difference between compound and simple interest by lending institutions would be from 01st March 2020 to 31st August 2020 (six months/ 184 days). FREQUENTLY ASKED QUESTIONS (FAQs) COVID 19 Ex Gratia to borrowers for difference in interest Date 26th October 2020 1. Which customer are eligible to benefit from this scheme? The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. 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. So how will customers know if they have been refunded or have received a cashback? Do I need to place a request to get the Ex-Gratia Interest refund? • Submit the request and our service team will respond to you soon, Connect with us on social media and stay updated for our latest news and offers, 6th Floor,Bajaj Finserv Corporate Office, Ex Gratia Payment Ex Gratia Payment. You can click here to login to Customer Portal Experia and go to My Relations tab to check the exact amount and calculation for respective loans in your loan statement. 2 crores (sanctioned limits or outstanding amount) and any loan account which is standard and not categorized as Non-Performing Asset (NPA) as on 29.2.2020 will be eligible for Ex-Gratia payment under this scheme. Interest-on-interest waiver: Crop, tractor loans not part of ex-gratia relief scheme. Such borrowers are eligible for refund of differential interest from 1st March 2020 upto the date of closure of account (not later than 31st August 2020). The period reckoned for refund shall be from March 1 to August 21, 2020 that is six months period or 184 days, it said. Eligibility and Dates of Reserve Bank of India Ex Gratia Scheme click here to login to Customer Portal Experia. I have a query related to COVID-19, Ex-Gratia Interest relief. Below is a sample calculation of Ex-Gratia amount for different rate of interest -. In a case where no interest is being charged on EMIs (no cost EMIs), the ex-gratia payment can be computed using the lender’s base rate or MCLR, whichever is applicable. Yes, you will be eligible for the scheme. • For queries related to COVID-19, Ex-Gratia Interest Relief, you may please follow the steps here for support: Loan accounts should be standard in the books of the lending institutions as on 29.02.2020. Latin for “by favour”. The waiver scheme is made to reimburse the compound interest charged during the given period. The ex-gratia relief will be credited to the account of all eligible borrowers without any requirement to apply. The payable ex-gratia amount shall have to be credited to the account of the borrower by the respective lending institutions as ex-gratia payment under the scheme on or before 5.11.2020. It may be noted that all individual borrowers and small businesses with loans up to Rs 2 crore are eligible for a refund or cashback under the government’s loan moratorium compound interest waiver scheme. No. The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply. If the Government’s intention is to mitigate the sufferings of the borrowers, this Penal Interest should also be refunded to the borrowers and to be claimed from the Government as ex-gratia. What's New; Attachment File Date The period reckoned for refund shall be from March 1 to August 21, 2020 that is six months period or 184 days, it said. Individual lending institutions will finalize the list of eligible borrowers for the relief based on the guidelines from Govt of India. My Loan has been restructured, what is the impact of the same? Ex-gratia is calculated similarly as Bonus on Basic+DA. 3. Earlier this month, in the matter of interest relief to borrowers during the moratorium, the Centre had promised to make good the interest on interest. ◦ ‘Loan against Security’ How will the Ex-Gratia Interest Relief amount be calculated?   • Query Description: BFL Ex Gratia Payment Related New Delhi: Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified. Will I get the Ex-Gratia interest refund where I took Moratorium for 3 months and then closed the loan? What is the last date for raising queries relating to Ex-Gratia? Watch: Rare Gangetic dolphin beaten to death in Uttar Pradesh's Pratapgarh, No breakthrough in fresh round of Centre-farmers' talks, next meeting on January 15, Copyright © 2021 Living Media India Limited. What will be the treatment of penal interest/ penalties while arriving at the rate of interest? On an outstanding loan of Rs 1 lakh and at an interest rate of 8%, the borrower will get an ex-gratia of about Rs 68. Those who had not availed the moratorium will also get the benefit of the scheme. I have taken partial Moratorium; will I be eligible for this relief package? The ex-gratia amount is treated as income and taxed at the normal slab rate.   • Query Type: Interest Refund No. The period reckoned for refund shall be from 1st March 2020 to 31st August 2020. 6 months period / 184 days. Such borrowers are eligible for refund of differential interest from 1st March 2020 upto the date of closure of account (not later than 31st August 2020). As it does not have a fixed percentage, the amount keeps varying and it depends from one company to another. What Rate of Interest (%) shall be considered for calculating the package, i.e. Will I also be eligible for Ex-Gratia interest refund? by. RBI Ex Gratia Payment Scheme (Loan) This article explains the Online procedure to apply for the RBI Ex Gratia Scheme, Eligibility, Date, and Interest Calculation on the official website. The Department of Financial Services has issued a set of Frequently Asked Questions (FAQs) on the interest waiver scheme, or the scheme of ex-gratia payment of difference between simple and compound interest to eligible borrowers for a six month period between March 1 and August 31, 2020.Get latest Economy online at cnbctv18.com No. Q4. ◦ ‘Loan against Fixed Deposits’. No. Ex-gratia payment made voluntarily by an employer is not taxable as ‘profits in lieu of salary _____ 24 December 2015 Background Section 17(3) of the Income-tax Act, 1961 (the Act) brings certain payments such as profits in lieu of salary within the ambit of ‘income from salaries’. As a part of the interest waiver scheme, banks and other lending institutions will have to mandatorily provide ex gratia payment or a refund to all debtors that is equivalent to the difference between compound interest and simple interest charged on the outstanding loans or sanctioned limit up to Rs 2 crore including all borrowings/facilities from all banks or financial institutions. Calculation of ex-gratia. From a borrower’s perspective, the benefit would be relatively higher for those who had availed of higher-yielding loans. 16. Requests of this nature will not be entertained beyond the said date. The outstanding as on 29.02.2020 will be the reference amount for calculating the differential. Loan moratorium: Do you have to apply for govt’s interest waiver scheme? The government’s scheme applies to housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans. What will be the treatment of penal interest/ penalties while arriving at the rate of interest? What are the eligibility criteria of the ex gratia scheme? Under the ex-gratia scheme of government, any loan of up to Rs 2 crore taken before February 29, 2020 will not be charged with compound interest from March 1 to August 31, 2020. Even a week after the finance ministry approved a scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months of loans up to Rs 2 crore, borrowers are still wondering how they will benefit from the scheme. 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 upto Rs. Any requests and queries for Ex-Gratia interest refund will be taken until 30th Nov’20. The Finance Ministry has approved guidelines for a scheme to grant ex-gratia payment of the difference between compound interest and simple interest for … Under the ex-gratia scheme of government, any loan of up to Rs 2 crore taken before February 29, 2020 will not be charged with compound interest from March 1 to August 31, 2020. 10,00,000 at 10%. The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said. Everything About the Ex-gratia Relief Provided by the Government of India. 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 professional loans. 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 (1.3.2020 to 31.8.2020) (the ‘Scheme’) on October 23, 2020. The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said. Umesh Singh. The period reckoned for refund shall be from March 1 to August 21, 2020 that is six months period or 184 days, it said. For consumer durable loans, the rate of interest which will be applied for calculating the interest on interest benefit shall be contracted at the same rate as specified in the loan agreement. Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified. As soon as the banks and financial institutions complete the process of crediting the interest on interest waiver, they can claim a reimbursement from the government. Banks are likely to send a text message to the concerned borrower on his/her mobile number that is registered with the bank. This penal interest would have been charged for the installments which were not paid during the moratorium period in the case of Term Loans. Fresh round of Centre-farmers' talks fail to yield any result, what's next? # What is the last date for raising queries relating to Ex-Gratia? A voluntary payment made by the reinsurer in response to a loss for which it is not technically liable under the terms of its contract. # Will I get the Ex-Gratia interest refund if my loan account is NPA? Requests of this nature will not be entertained beyond the said date. Any repayment / credits subsequent from 01.03.2020 – 31.08.2020 shall be ignored for the purpose of calculation. An ex gratia payment is made to an individual by an organization, government, or insurer for damages or claims, but it does not require the admittance of liability by the … ROI (%) considered at the time of sanction or ROI (%) as on 29.02.2020? 0. Are “partially disbursed loans” covered under the relief package? The Reserve Bank of India then asked all banks in the country to refund the difference between simple and compound interest to all eligible borrowers under the scheme. • In the ‘Raise a Request’ page, select your loan / loan type and product description (Photo: Reuters/Representational image), Loan moratorium: How to know if bank has credited ‘interest on interest’ refund, expected to credit the refund or cashback to eligible borrowers by the end of the day. Customers will not be able to avail this facility for these loans below: NEW DELHI: In a festival gift to borrowers, the finance ministry on Wednesday approved guidelines for a scheme for grant of ex-gratia payment of the difference between compound interest … Centre issues guidelines for loan interest waiver, check how much money may be returned. • 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 29th February 2020. Viman Nagar, Pune – 411014, IRDAI Corporate Agency Registration Number, Loan Against Property For Chartered Accountants, Hybrid Flexi Personal Loan EMI Calculator, Platinum Choice First-Year-Free SuperCard, Pre-approved category on Smartphones and Laptops, PRE-APPROVED OFFERS ON KITCHEN APPLIANCES, Home, Kitchen appliances & Furniture on EMI, PRE-APPROVED OFFERS ON FITNESS, TRAVEL, FASHION. The outstanding as on 29.02.2020 shall be the reference amount for calculating the differential interest amount. ... the government had recently passed a scheme to “grant ex-gratia payment of the difference between compound and simple interest to borrowers of specified loan … The compound interest comes out to a very small amount. Tax on ex-gratia payment. BP.BC.47/21.04.048/ 2019-20, dated 27.3.2020 and extended on 23.5.2020. The contracted rate / interest rate prevailing as on 29.02.2020 which is considered The ex-gratia payment under the government’s interest waiver scheme will be admissible irrespective of whether the borrower has fully or partially availed the moratorium. 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 upto Rs. Any requests and queries for Ex-Gratia interest refund will be taken until 30th Nov’20. a. Yes. • Select your query under the tab: Add New Query What is the ex gratia Interest Relief scheme announced by Government of India? What is the ex gratia payment to the borrower under the scheme announced by Ministry of Finance, Government of India dated 23rr October 2020 The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. If the interest rate is 14%, Rs 210 will be credited. • Please select: The differential amount will be credited to the respective loan account (s) of the borrower. How will the list get finalized for the ex gratia to borrowers scheme? All banks and financial institutions in the country have started refunding eligible borrowers for the ‘interest on interest’ or compound interest charged during the loan moratorium period, as directed by the government. How will Bajaj Finance Ltd assess whether a customer has aggregate loan facilities up to INR 2.00 CR from the banking system? The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. 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. The difference between compound and simple interest will be paid to you. The relief will be available to you irrespective whether you have availed or partially availed or not availed the moratorium on repayment as announced by RBI vide DOR. In which of my accounts will the differential amount be credited? The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said. loan moratorium Centre issues guidelines for loan interest waiver, check how much money may be returned. When something has been done ex gratia, it has been done voluntarily, out of kind or grace.In law, an ex gratia payment is a payment made without the giver recognising any liability or legal obligation.. If you do not pay this tax liability, you may be penalised—this can include penalty tax, interest and, in some cases, prosecution. “In view of the unprecedented and extreme Covid-19 situation, the object of the scheme is to provide ex gratia payment of difference between compound interest and simple interest by way of relief for the period from March 1, 2020 to August 31, 2020 to borrowers in specified loan accounts. Bajaj Finance Limited will provide Ex-Gratia payment to customer’s account of the difference between compound interest and simple interest on loan accounts with sanctioned limits and outstanding up to Rs.2 crores (aggregate of all the borrowings/ facilities from all the banks and financial Institutions) for the period from 1st March 2020 to 31st August 2020 (6 months / 184 days). New Delhi: Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified. The relief will come to borrowers in the form of grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30). For example on an outstanding loan of Rs 1 lakh( with an interest rate of 8%), the borrower will get an ex-gratia of about Rs 68. Will I get the Ex-Gratia interest refund if my loan account is NPA? FAQs for scheme of Ex gratia payment to borrowers for difference in interest. Submitted by admin on Tue, 10/27/2020 - 19:25. Neither, Bajaj Finance Limited will process and credit your loan account on or before 5.11.2020. The loan will entail only simple interest. The main features / highlights of the scheme are as under: COVID-19 EX GRATIA SCHEME. The period reckoned for refund shall be for 6 months period/184 days from 01-03-2020 to 31-08-2020. • In respect of consumer durable 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. all individual borrowers and small businesses with loans up to Rs 2 crore, Loan moratorium interest waiver scheme: All your questions answered. In case where no interest is being charged on equated monthly instalments for a specified period, for the purpose of relief, interest may be applied at MCLR/ Base rate. No. Ex gratia payments in settlement agreements are great things if you can get them, because they offer a unique tax break only really available to employees who are leaving work after a dispute or redundancy situation. We will assess this based on information available with us, as well as information accessible from credit bureaus. • In respect of Education loans, Housing loans, Automobile loans, Personal loans to professional 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 29th February 2020. Non-fund-based limits will not be included for arriving at the eligibility. What will be the treatment of penal interest/ penalties while arriving at the rate of interest? I have been paying my EMI’s in cash, will I get the refund in cash or cheque? Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified. Workshop on Scheme for grant of ex-gratia payment of the differential interest October 27, 2020 / 1 Comment / in Uncategorized / by Vinod Kothari Consultants While compound interest is the unquestionable reality of the world of banking and finance, somehow, courts have always been disapproving of the idea of “interest on interest”. d. The period reckoned for refund shall be from 1st March 2020 to 31st August 2020, i.e. New Delhi: The Reserve Bank of India (RBI) issued direction on Tuesday to all lending institutions to implement provisions of Scheme for grant of ex-gratia payment of difference between compound and simple interest for six months to borrowers in specified loan accounts (1 March to 31 Aug) and take necessary action within the stipulated time. 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