In what may be a severe hit for farmers and other stakeholders in the country's agricultural sector, crop loans, tractor loans and other agriculture loans will not be part of the scheme for ex-gratia payment of difference between interest on loans up to Rs 2 crore.

In an additional list of frequently asked questions (FAQ), the Department of Financial Services (DFS) said: "Crop loans and tractor loans, etc are agriculture and allied activities loans and are not part of the eight segment/classes eligible under the scheme."

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.

The finance ministry wants all payments to be credited in the accounts of borrowers well before Diwali by November 5.

The scheme can be availed by designated class of borrowers for the period of 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.

The additional list of FAQs said that credit card dues outstanding as of February 29 would be considered for giving relief to the borrowers and the benchmark rate applicable for such relief would be the contact rate, as on February 29, which is used by the credit card issuers for the purpose of EMI loans.

As per the scheme, the lending institutions shall credit the difference between compound interest and simple interest with regard to the eligible borrowers in respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27, 2020.

The lending institution after crediting the amount will claim the reimbursement from the Central government. All banks and NBFCs are covered under the scheme.

The government has clarified that the payment does not constitute a legal, contractual or equitable liability of the Central government and is only an ex-gratia payment to borrowers in view of the Covid-19 pandemic..