Cabinet approves Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts


The Union Cabinet chaired by Hon’ble Prime Minister Shri Narendra Modi has approved the payment of ex-gratia amount of Rs. 973.74 crore pertaining to remaining claims submitted by Lending Institutions (LIs) under 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).


Benefits:


          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.


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.










S No

Date of Clam Submission by SBI

No. of lending Institutions

No. of Beneficiaries

Amount of Claim Received

Amount Disbursed

Pending Disbursement

1

23.3.2021

1,019

1406,63,979

4,626.93

4,626.93

2

23.7.2021 & 22.9.2021

492

499,02,138

1,316.49

873.07

443.42

3

30.11.2021

379

400,00,000

216.32


216.32

4

Resubmitted by SBI

101

83,63,963

314.00

314.00

Total


1,612

2389,30,080

6,473.74

5,500.00

973.74




Background:


            In the context of the COVID-19 pandemic, “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)” was approved by the Cabinet in October, 2020, envisaging therein an outlay of Rs. 5,500 crore. Following category of borrowers were eligible for ex-gratia payment under the scheme:


  1. MSME loans up to Rs. 2 crore
  2. Education loans up to Rs. 2 crore
  3. Housing loans up to Rs. 2 crore
  4. Consumer durable loans up to Rs. 2 crore
  5. Credit card dues up to Rs. 2 crore
  6. Auto loans up to Rs. 2 crore
  7. Personal loans to professionals up to Rs. 2 crore
  8. Consumption loans up to Rs. 2 crore


Budget allocation of Rs. 5,500 crore was made for the scheme in FY 2020-2021. Whole amount of Rs. 5,500 crore, as approved by the Cabinet, 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.


Now, SBI has informed that it has received consolidated claims of Rs. 6,473.74 crore approx. from lending institutions. As Rs. 5,500 crore has already been disbursed to SBI, approval of the Cabinet is now being sought for balance amount of Rs. 973.74 crore.


     *****


DS




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Hong Kong – Interest rate of second interest payment for iBond Series due 2023

Interest rate of second interest payment for iBond Series due 2023

******************************************************************


The following is issued on behalf of the Hong Kong Monetary Authority:

     The Hong Kong Monetary Authority, as representative of the Hong Kong Special Administrative Region Government, announces today (November 2) the relevant per annum interest rate for the second interest payment of iBond Series due 2023 (issue mumber 03GB2311R; stock code: 4239) (the Bonds) issued under the Retail Bond Issuance Programme of the Government Bond Programme.
      
     According to the Issue Circular dated October 5, 2020 for the Bonds, the second interest payment of the Bonds is scheduled to be made on November 16, 2021, and the relevant interest rate is scheduled to be determined and announced on November 2, 2021 as the higher of the prevailing Floating Rate and Fixed Rate.   
      
     On November 2, 2021, the Floating Rate and Fixed Rate are as follows:
      
Floating Rate: +1.53 per cent (Annex)
Fixed Rate: +2.00 per cent
      
     Based on the Floating Rate and Fixed Rate set out above, the relevant interest rate for the second interest payment is determined and announced as 2.00 per cent per annum. 

Hong Kong – Composite Interest Rate: End of September 2021

Composite Interest Rate: End of September 2021

**********************************************


The following is issued on behalf of the Hong Kong Monetary Authority:

     The Hong Kong Monetary Authority (HKMA) announced today (October 20) the composite interest rate at the end of September 2021. (Note 1)
      
     The composite interest rate, which is a measure of the average cost of funds of banks, remained unchanged at 0.19 per cent at the end of September 2021 (see Chart 1 in the Annex) as the weighted funding cost for deposits was steady during the month (see Chart 2 in the Annex). (Note 2)
      
     The historical data of the composite interest rate from the end of the fourth quarter of 2003 to the end of September 2021 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk).

Note 1: The composite interest rate is a weighted average interest rate of all Hong Kong dollar interest-rate-sensitive liabilities, which include deposits from customers, amounts due to banks, negotiable certificates of deposit and other debt instruments, and all other liabilities that do not involve any formal payment of interest but the values of which are sensitive to interest rate movements (such as Hong Kong dollar non-interest bearing demand deposits) on the books of banks. Data from retail banks, which account for about 90 per cent of the total customers’ deposits in the banking sector, are used in the calculation. It should be noted that the composite interest rate represents only average interest expenses. There are various other costs involved in the making of a loan, such as operating costs (e.g. staff and rental expenses), credit cost and hedging cost, which are not covered by the composite interest rate.

Note 2: Since June 2019, the composite interest rate and weighted deposit rate have been calculated based on the new local “Interest rate risk in the banking book” (IRRBB) framework. As such, these figures are not strictly comparable with those of previous months.

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Hong Kong – Composite Interest Rate: End of February 2021

The following is issued on behalf of the Hong Kong Monetary Authority:
 
     The Hong Kong Monetary Authority (HKMA) announced today (March 18) the composite interest rate at the end of February 2021. (Note 1)
      
     The composite interest rate, which is a measure of the average cost of funds of banks, decreased by 1 basis point to 0.23 per cent at the end of February 2021, from 0.24 per cent at the end of January 2021 (see Chart 1 in the Annex). The decrease in composite interest rate mainly reflected a decrease in the weighted funding cost for deposits during the month (see Chart 2 in the Annex). (Note 2)
      
     The historical data of the composite interest rate from the end of the fourth quarter of 2003 to the end of February 2021 are available in the Monthly Statistical Bulletin on the HKMA website (www.hkma.gov.hk).
 
Note 1: The composite interest rate is a weighted average interest rate of all Hong Kong dollar interest-rate-sensitive liabilities, which include deposits from customers, amounts due to banks, negotiable certificates of deposit and other debt instruments, and all other liabilities that do not involve any formal payment of interest but the values of which are sensitive to interest rate movements (such as Hong Kong dollar non-interest bearing demand deposits) on the books of banks. Data from retail banks, which account for about 90 per cent of the total customers’ deposits in the banking sector, are used in the calculation. It should be noted that the composite interest rate represents only average interest expenses. There are various other costs involved in the making of a loan, such as operating costs (e.g. staff and rental expenses), credit cost and hedging cost, which are not covered by the composite interest rate.

Note 2: Since June 2019, the composite interest rate and weighted deposit rate have been calculated based on the new local “Interest rate risk in the banking book” (IRRBB) framework. As such, these figures are not strictly comparable with those of previous months.