The difference between compound interest and simple interest of the Moratorium period will be available to the borrowers as ex-gratia

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The Reserve Bank of India (RBI) has informed the Supreme Court that the central government has come up with a scheme under which the borrower has to pay between the compounding and simple interest for a period of six months (March to August) in the wake of Kovid-19. The difference of will is given as ex-gratia amount. This ex-gratia amount will be deposited in the loan accounts of the borrowers.


The benefits of the scheme include MSMEs, education, housing, consumer durables, credit cards, and automobile loans, besides personal loans taken by professionals, consumption loans whose dues do not exceed Rs 2 crore.

The affidavit states that the scheme is for all the borrowers who have fully or partially taken advantage of the Moratorium or who have not taken advantage of it. The Finance Ministry has approved the scheme on 23 October last, in view of the status of Kovid-19.


In response to public interest petitions challenging the imposition of interest on loans by others including Gajendra Sharma, RBI has stated that on October 26, all commercial banks (including small finance banks, local area banks, and regional rural banks), all primary ( Urban) Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, All India Financial Institutions and all non-banking financial companies (including housing finance companies) have been advised to comply with the provisions of the scheme and for a fixed time. Take the necessary steps within. The affidavit states that the act of depositing the ex-gratia amount will be completed by November 5. The Supreme Court will consider this affidavit on November 3.