Govt Giving Cashback To All Credit Card Users! Ex-Gratia On Loan Moratorium Applicable For All Borrowers
At the start of this month, some credit card providers surprised their customers as they credited the government’s ex-gratia money to their accounts.
A Pleasant Surprise For Credit Card Users
From the consumer’s point of view, they were taken aback as they had paid their dues on time.
Since they were not expecting the ex-gratia money which has been announced earlier for the moratorium period between March and August.
Some thought that their issuers had made a mistake.
Especially the ones who surrendered their credit cards during the moratorium period or cleared off their loans in the past eight months.
Basically, now banks are paying the customers who had an outstanding bill amount as on 29 February 2020.
So, if you have spent through your card before 29 February then you are eligible for the ex-gratia money despite clearing your bill within the due date but after 29 February.
The same is applicable to those who surrendered their cards or repaid loans after 29 February.
On the other hand, few banks such as Standard Chartered Bank, are not giving ex gratia payment for credit card holders claiming that they didn’t charge “interest on interest”.
Who Is Eligible For This Amount?
During lockdown, the Reserve Bank of India (RBI) offered six months’ moratorium to borrowers and credit card customers due to financial stress.
This moratorium helped in allowing the borrowers to postpone the repayment of loans for six months.
According to this, they could opt to not pay the equated monthly installments (EMIs) during the said six months.
Moratorium was basically a postponement of EMIs and not a waiver.
In case of lender banks, they have added the interest accrued during the moratorium period to the loan’s principal amount.
Now the finance ministry has come up with a scheme to provide relief to borrowers.
Under this scheme, the retail borrowers and small businesses with borrowing up to Rs 2 crore need not to pay the compounded interest or interest on interest that accrued during the moratorium period.
To simplify this, the government came up with a formula.
The ministry asked banks to reimburse the difference between the compound and simple interest on loans to eligible borrowers through RBI.
So now banks started crediting the money which many credit card customers acknowledging the amount they received.
Basically, the amount depends on the outstanding balance and the interest rates.
You can approach your bank, if you have not received any payment in case you have a retail loan, including home, two-wheeler, auto, personal, consumer durable and education loan, or had credit card outstanding as on 29 February.