Cabinet sanctions Rs 973 cr to SBI for ex-gratia payment to borrowers

On March 27, 2020, RBI announced a loan moratorium on payment of instalments of term loans falling due between March 1 and May 31, 2020, due to the pandemic

The Centre on Wednesday approved Rs 973.74 crore as reimbursement related to the loan moratorium that was implemented in 2020 amid the Covid pandemic. This will help small borrowers upto Rs 2 crore in sectors such as education, housing, consumer durable and other personal loan sections.

The decision was taken in the Union Cabinet meeting chaired by Prime Minster Narendra Modi.

The Reserve Bank of India announced the loan moratorium scheme to help borrowers affected by the pandemic. Those eligible for loans were borrowers of loans upto Rs 2 crore in MSME, education, housing, auto, personal loans and consumer durables among others.

The Union Budget last year had made provision of Rs 5,500 crore for the scheme of ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts. Of that, Rs 4,626 crore had already been paid in 2020-21. Of the pending claims, the Centre allowed payment of nearly Rs 934 crore.

The State Bank of India is the nodal agency for reimbursement of claims.

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