Eligibility: The Credit Card outstanding (i.e. I got it for all my secondary cards - ICICI, Amex but not on my primary HDFC DB card. 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, which mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions. All Banking Companies, Urban Co-operative Banks, and Non-Banking Financial Companies (NBFCs) registered with RBI [through RBI], 5. 18. While the waiver will offer a modicum of relief in terms of cash flows, repayment discipline among borrowers after the moratorium ended – and thus medium-term delinquencies at banks and NBFCs – will bear watching, it added. HDFC Bank 1426.70 (+0.76%) HDFC Life 713.75 (+2.57% ... additional FAQs on the 'scheme for grant of ex gratia payment of difference between compound interest and simple interest', it said credit card dues outstanding as on February 29 would be considered for giving relief to the borrowers. . Whether Accounts categorised as SMA-0, SMA-1 and SMA-2 are eligible to avail the benefit of the package? 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. Individual banks/ lending institutions will finalise the list of eligible borrower for the relief based on the GoI guidelines. Any repayment / credits subsequent from 01.03.2020 – 31.08.2020 shall be ignored for the purpose of calculation. Business Standard. Govt's ex-gratia payment of interest on interest to cover 75% borrowers The tab that the government will pick-up for such concession is estimated at about Rs 7,500 crore, according to CRISIL's analysis. 12. (ii) Lending institution must be either a banking company, or a Public Sector Bank, or a Co-operative Bank [i.e., an Urban Co-operative Bank or a State Co- operative Bank or a District Central Co-operative Bank], or a Regional Rural Bank, or an All India Financial Institution, or a Non-Banking Financial Company or a Housing Finance Company registered with RBI or National Housing Bank as the case may be. The government is giving this benefit to provide relief to small borrowers impacted by the coronavirus (Covid-19) pandemic. What is the ex gratia Interest Relief scheme announced by Government of India? Further, the government has issued two clarificatory FAQs on 26.10.2020 and 29.10.2020 on COVID-19 ex-gratia to borrowers for the difference in interest. The period to be reckoned for crediting of difference between compound interest and simple interest by the lending institutions mentioned in clause 3 above to eligible borrowers as per clause 4 above would be from 1.3.2020 to 31.8.2020 (six months / 184 days). Yes. Yes. While making the calculation repayments in the loan account during the period to be reckoned will be ignored. The union cabinet has discussed and is believed to have agreed on a proposal for an Ex-gratia payment of 'interest on interest' charged on loans for the six-month moratorium period announced in the wake of the COVID-19 pandemic, sources told CNBC Awaaz.Get latest … (3) Credit card dues — The rate of interest shall be the Weighted Average Lending Rate (WALR) charged by the card issuer for transactions financed on EMI basis from its customers during the period from Pt March 2020 to 3Pt August 2020. on October 23, 2020, which mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions. Q11. (b) The aforesaid eligibility shall be subject to the following further conditions and stipulations: (i) Account should be standard as on 29.2.2020, i.e., loan should not be a Non-Performing Asset (NPA) as on 29.2.2020. As a uniform rate is not available, WALR will be utilised as the benchmark rate. BP.BC.47/21.04.048/2019-20 dated 27.03.2020 and extended on 23.05.2020. No Interest Rebate on Credit Card. Whether commercial vehicle automobile loans of individuals are covered under the scheme? Lending institutions are to assess this on the basis of information available with them as well as information accessible from credit bureaus. A Non-Banking Financial Company— Micro Finance Institution should be a member of a Self-Regulatory Organisation (SRO) recognised by RBI. (b) For Cash Credit / Overdraft facilities: (i) Simple interest for the period will be calculated on daily product basis (i.e., on the daily outstanding as at end of the day) at the rate of interest as on 29.2.2020. 47/21.04.048/2019-20, dated 27th March 2020 and extended on 23rd May 2020. What is the ex gratia payment to the borrower under the scheme announced by GoI? Further, for the purpose of claiming of reimbursement by respective lending institutions, calculation of the reimbursable ex-gratia amount shall be as detailed in clauses 8 and 9 hereof. Loans for consumption purposes (e.g., social ceremonies, etc.) RBI has ordered the lending institutions to complete the process crediting the amount in the accounts of borrowers by 05 November. BP.BC.47/21.04.048/2019-20, dated 27th March 2020 and extended on 23rd May 2020. 2. No. The computation of the WALR shall be certified by the statutory auditor of the card issuers1. 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 party making the payment. Did anyone get the "Ex-gratia refund" on their HDFC credit card yet? 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. Last Friday, the government had 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. This could have posed significant challenges for the government as well as the financial sector. Operational guidelines for the scheme are attached. How can I flag my grievances related to the relief package? 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). (ii) Compound interest will be calculated for the period at the rate of interest as on 29.2.2020 and compounding will be done on monthly rests. 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 up to INR 2 crores (aggregate of all the borrowings / facilities from all the banks and financial Institutions) for the period from 01-03-2020 to 31-08-2020 (6 months / 184 days). 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. 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. Credit card interest waiver In the case of credit card dues, the interest rate will be the weighted average lending rate (WALR) charged. Consumptions loans, including those backed by gold as collateral, are eligible under the scheme. Loan accounts should be standard in the books of the lending institutions as on 29.02.2020. 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 professionals and Consumption loans. (2) Consumer durable loans — The rate of interest to be applied for calculating the difference between simple and compound interest shall be the contracted rate as specified in loan agreement/ documentation. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. After the exercise mentioned in paragraph 5 above has been completed, lending institutions can lodge their claim for reimbursement latest by 15.12.2020. 3. SBI is advised to appropriately equip its designated officer(s) / cell for processing such claims in a timely manner, and to notify details of the same on its website. Loan accounts with sanctioned limits and outstanding not exceeding Rs.2 crores (aggregate of all facilities with all the lending institutions) as on 29.02.2020. b. Last Updated at October 26, 2020 18:07 IST. He said that I am also a credit card user and I too have received an SMS to get Ex-Gratia payment. If I have already closed my loan account after March 1st 2020 , how will the differential amount be paid to me? 5. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Yes. Will I be eligible for relief if my credit card balance is in “Credit” as on 29.02.2020? New Delhi: Earlier this month, all lending institutions were asked to implement provisions of Scheme for grant of ex-gratia payment of the difference between compound and simple interest for six months to borrowers in specified loan accounts (1 March to 31 Aug). The benchmarks and modalities for ex-gratia payment of difference between compound interest and simple interest under the scheme would be as detailed in the attached operational guidelines. The RBI has notified the Scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months ending August 31, 2020. As a premium subscriber you get an across device unfettered access to a range of services which include: Welcome to the premium services of Business Standard brought to you courtesy FIS. The potential burden on lenders – already facing profitability pressure and asset-quality challenges because of the Covid-19 pandemic and challenging macroeconomic environment – has eased, it added. 4. Who will finalise the list of eligible accounts? What will be the treatment of penal interest/ penalties while arriving at the rate of interest? 16. (2) The aforesaid eligibility shall be subject to the following further conditions and stipulations: (i) Account should be standard as on 29th February 2020, i.e., loan should not be a Non-Performing Asset (NPA) as on 29th February 2020. 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). No Interest Rebate on Credit Card During the hearing in the Supreme Court, Tushar Mehta, who is appearing for the Central Government, said that the credit card user will also get ‘Ex-Gratia’. its circular DOR. 1. … This scheme shall apply to all lending institutions, which must be either a banking company, or a Public Sector Bank, or a Co-operative Bank [i.e., an Urban Co-operative Bank or a State Co-operative Bank or a District Central Co-operative Bank], or a Regional Rural Bank, or an All India Financial Institution, or a Non-Banking Financial Company or a Housing Finance Company registered with Reserve Bank of India (RBI) or National Housing Bank as the case may be. BP.BC.47/21.04.048/2019-20, dated 27th March 2020 and extended on 23rd May 2020. 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. (1) As Education loans, Housing loans, Consumer Durable loans, Credit card dues, Auto Loans, Personal loans and Consumption loans are loans that are in the form of a Term Loan / Demand Loan and not a Cash Credit [CC] or an Overdraft facility [OD], the outstanding in the account as at the end of 29.2.2020 will be the reference amount for Term Loans on which the interest (simple as well as compound) will be calculated. Support quality journalism and subscribe to Business Standard. Enjoy Reading! 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. 8. As a uniform rate is not available, WALR will be utilised as the benchmark rate. The Top Court, Hon’ble Supreme Court is hearing a batch of petitions that raised issues concerning the six months loan moratorium period announced due to the COVID-19 pandemic. Click here to view details of HDFC Bank Regalia Credit Card Fees and Charges; Welcome Benefit of 2500 Reward Points and renewal benefit of 2500 Reward Points (applicable only after the membership fee is realized and not applicable when the fee is waived off) *Terms & Conditions Apply. The Ex-Gratia Payment Scheme is the payment of the difference between the Compound Interest and the Simple Interest for six months ending 31 August 2021 to borrowers in specified loan accounts. 11. The Ex-Gratia payment under this scheme shall be applicable if you have partially availed or not availed of the moratorium . Compounding of interest shall be at monthly rests. Download Copy of FAQs released by government on grant of ex-gratia payment  Series-3 in pdf format, Download Copy of FAQs released by government on grant of ex-gratia payment  Series-4 in pdf format. Your support through more subscriptions can help us practise the journalism to which we are committed. No. (1) Borrowers in the following segments/classes of loans, who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs. The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. Whether crop loans and other agriculture loans are covered under the scheme? 7. In which of my accounts will the differential amount be credited? Any issues/queries relating to interpretation of this programme will the interest be calculated for cash credit/ overdraft accounts credit! 18:07 IST have already closed my loan account ( s ) of all eligible by! `` ex-gratia refund '' on their HDFC credit card user and I too have ex gratia interest refund in hdfc credit card an to! Late payment would not be reckoned will be the treatment of penal interest/ penalties while arriving at rate. Amount will be ignored only help us practise the journalism to which we are committed Institution are covered the! 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