New Delhi, Jan 19 (PTI) The government on Wednesday approved sanction of Rs 973.74 crore to State Bank of India (SBI) as reimbursement related to loan moratorium that was implemented in 2020 amid the pandemic.

This amount is for the payment of claims submitted by lending institutions (LIs) under the scheme for grant of ex-gratia to borrowers in specified loan accounts during the moratorium period announced by RBI in March 2020.

Briefing media on the Cabinet decision, Information and Broadcasting Minister Anurag Singh Thakur said the Budget had made provision of Rs 5,500 crore for the scheme of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts.

Of this, Rs 4,626.93 crore payment was made in 2020-21, he said, adding, additional claims of Rs 1,846 crore were received during the current financial year.

SBI was given Rs 873.07 crore towards reimbursement of ex-gratia between July 23 and September 22, 2021. To clear the remaining amount, Thakur said, the Union Cabinet has approved sanction of Rs 973.74 crore to SBI towards payment of these dues.

“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,” an official statement said.

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. Later, the same was extended to August 31.

Financial and non-banking financial institutions were asked to credit the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme in November 2020.

The Ministry of Finance has said that after crediting this amount, the lending institutions would claim reimbursement from the central government. SBI was made a nodal agency for reimbursement of claims.

By granting ex-gratia payment of difference between compound interest and simple interest during the six month moratorium period to distressed/vulnerable 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 statement said.

In the context of the COVID-19 pandemic, the statement said, “scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts” was approved by the Cabinet in October 2020, envisaging an outlay of Rs 5,500 crore.

The scheme covered MSME loans, education loans, housing loans, consumer durable loans, credit card dues, auto loans, personal loans to professionals and consumption loans up to Rs 2 crore.

Budget 2020-21 allocation of Rs 5,500 crore has been disbursed to SBI, the nodal agency under the scheme, for consequent reimbursement to lending institutions.

“The estimated amount of Rs 5,500 crore was arrived at by extrapolating the share of SBI and Scheduled Commercial Banks for the aforementioned category of loans. It was also apprised to the Cabinet that the actual amount would be known once individual lending institutions submit their pre-audited account-wise claims,” it said.

Now, SBI has informed that it has received consolidated claims of Rs 6,473.74 crore approximately from lending institutions, it said, adding, as Rs 5,500 crore has already been disbursed to SBI, approval of the Cabinet was sought for balance Rs 973.74 crore. PTI NKD DP ANU ANU

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