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

The government on Wednesday approved sanction of Rs 973.74 crore to (SBI) as reimbursement related to loan moratorium that was implemented in 2020 amid the pandemic. 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 crore payment was made in 2020-21, he said, adding, an additional claim of Rs 1,846 crore is pending.

To clear this, he said, the Union Cabinet has approved sanction of remaining Rs 973.74 crore to SBI towards payment of these dues.

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 by November 30, 2020.

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