New Delhi, Oct 27 (KNN) In a bid to provide relief amid the pandemic, the Reserve Bank of India (RBI) has notified the Centre's scheme for ex-gratia payment of difference between interest on loans of up to Rs 2 crore.

"All lending institutions are advised to be guided by the provisions of the Scheme and take necessary action within the stipulated timeline," RBI said in a notification on Monday.

The Finance Ministry last week had approved guidelines for the same scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months of loans up to Rs 2 crore.

The guidelines came after the Supreme Court directed the Centre to implement "as soon as possible" interest waiver on loans of up to Rs 2 crore under the RBI moratorium scheme in view of the COVID-19 pandemic.

The lender will have to credit the amount to the account of the borrower on or before 5 November, giving relief to borrowers ahead of Diwali. Thereafter, the lender can claim reimbursement from the government by December 15.

Under the scheme, the ex gratia payment -- the difference between compound interest  and simple interest for six months -- will be made to borrowers whose aggregate loan sanctions and outstanding is not more than Rs 2 crore as on February 29, 2020. All categories of loans -- MSME, education, housing, personal, consumer -- and credit card dues will be eligible.

The scheme can be availed by designated class of borrowers from March 1 to August 31, 2020.

Housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans come under the ambit of the scheme.