A six-month “Scheme for ex-gratia payment” that distinguishes between compound interest (CI) and simple interest (SI) for borrowers with certain loan accounts was introduced by the RBI in response to the COVID-19 epidemic and its detrimental effects on everyone’s financial circumstances.
“By favor” is what “ex-gratia” implies. It is an amount that the government pays to a person in order to make up for the harm that they have endured. No obligation is accepted in exchange for the payment. Because there is no expectation of payment in exchange, the conduct is voluntary. An EX-Gratia payment made by a government agency or organization is seen as a kind gesture to make up for certain losses.
