Ex-Gratia Payment Scheme

Ex-Gratia Payment Scheme

On 23rd October 2020 Ministry of Finance, Government of India issued direction to all lending institutions to implement Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020).

In view of the unprecedented and extreme COVID-19 situation, the object of the Scheme is to provide ex-gratia payment of difference between compound interest and simple interest by ways of relief for the period from 1st March 2020 to 31st August 2020 to borrowers in specified loan accounts. Such payment does not constitute a contractual, legal or equitable liability of the Central Government and is only an ex-gratia payment for a designated class of borrowers in view of the COVID-19 pandemic.

The ex-gratia payment under this scheme shall be applicable irrespective of whether the borrower had fully availed or partially availed or not availed the moratorium on repayment announced by RBI vide its circular DOR.NO. BP.BC.47/21.04.048/2019-20, dated 27.03.2020 and extended on 23.5.2020.

Frequently Asked Questions

Under the Scheme launched by the Government of India on 23rd October 2020, the bank or lending institution will provide an ex-gratia payment to the borrower account, the difference between compound interest and simple interest for the period between from 1st March 2020 to 31st August 2020 (6 months / 184 days).

The ex-gratia payment will be applicable for -

  • Loan accounts with sanctioned limits and outstanding not exceeding INR 2 crores (aggregate of all facilities with all the lending institutions) as on 29 February 2020, subject to the loan accounts being standard (should not be a Non-performing Asset or NPA) in the books of the lending institutions as on 29 February 2020.
  • All eligible borrowers irrespective of whether they had availed or partially availed or not availed the moratorium on EMI repayments announced by RBI vide DOR. No. BP.BC.47/21.04.048/2019-20 dated 27 March 2020 and extended on 23 May 2020.

The ex-gratia payment will be adjusted towards the loan EMI and/or outstanding dues, if any, by 5th November 2020, as per the Government of India guidelines.

  • The ex-gratia payment will be adjusted towards your loan account EMI and/or outstanding dues, if any.
  • If your loan account has been closed after 29th February and before 31st August, the payment will be calculated for the period applicable and credited to your savings account held with the bank.
  • If you do not have any accounts open with the bank at the time of receiving the ex-gratia payment, then we will reach out to you on your last registered email id available with us, to obtain your other bank details.

The ex-gratia payment will be calculated basis the difference between compounding interest and simple interest for on your loan outstanding amount for 6 months or 184 days.

For example: If your Principal outstanding loan balance as on 29 February 2020 is INR 200,000 and the contracted Rate of Interest is 14.99%, then the ex-gratia amount will be calculated as below:

Contracted Rate as on 29 Feb'20

Principal balance as on 29 Feb'20

Start Date

End Date

No of Months 

No of days

Compound interest

Simple interest 

ex-gratia Payment

14.99%

INR 200,000

01-Mar-20

31-Aug-20

6

184

INR 15,598

INR 15,113

INR 485


  • If you feel that your ex-gratia payment amount has been incorrectly calculated, then kindly re-check your calculation in line with the above illustration.
  • Should you still wish to raise a dispute on the digibank app,
    • For existing Personal Loan accounts, go to the transaction history, select transaction not listed option and follow the steps to submit your request
    • For closed loan accounts, go to the transaction history for your Savings account, select the transaction and follow the steps to submit your request
  • For Home Loans, please reach out to your branch Relationship Manager / Service Manager.

If you have not received the ex-gratia payment, it may be due to multiple reasons,

  • your aggregate loan amount with all lending institutions exceeding the limits as mentioned in the notification; or
  • the outstanding status of your loan as on 29 February 2020 is not standard or is a NPA (non-performing asset); or
  • if you have a new/any loan account which is not eligible as per the scheme

If you do not have any open loan account with us at the time of the ex-gratia payment being credited, then we will credit the amount in your Savings account held with the bank.

If you have also closed your Savings account, then we will reach out to you on your last registered email id available with us, to obtain your other bank details.

Please note that it will take 7 working days to credit the ex-gratia payment amount, from the date of receipt of your other bank details and authorization instructions to credit the amount there.