Due to the Covid-19 pandemic and its negative impact on every individual’s financial situation, RBI has launched the “Scheme for ex-gratia payment” of distinction between CI (compound interest) and SI (simple interest) for 6 months to borrowers with specific loan accounts.
The term ‘Ex-Gratia’ means ‘by favor’. It is a payment made to a person by the government to balance the damage experienced by individuals. It is paid without acceptance of any liability. It is a voluntary action because the organization/payer does not expect any compensation in return. An EX-Gratia payment done by an organization or government is considered to be a good gesture to balance specific losses.