CAG takes care of amount cut by banks while paying interest

If you are worried about the fraction of money being taken by banks while paying interest incurred on your principal amount, you have a reason to smile. The fraction of money kept in the banks by way of rounding of interest tax collected from the various borrowers are being taken care by the Comptroller and Auditor General (CAG) of India.

According to last meeting of a Trust, chaired by CAG, the total amount collected out of rounding of interest tax has reached Rs 260 crore. The amount is spent for the welfare of persons with disability.

“The corpus amount is the amount accumulated out of fraction of money ranging from 0.05 paise to 0.49 paise which is being not paid to any account holder at the time of disbursal of interest. The interests are being paid in round of amount such as Rs 100 and not as Rs 100.45. The remaining 0.45 paise is being deposited in the banks,” an official said.

“Taking cognisance of a civil appeal, the Supreme Court had in 2004 directed creation of a Trust to be managed by the CAG as chairman of the Trust with Law Secretary and Finance Secretary (Secretary Financial Services) as its members,” the official said. 

The official added that since the Trust is being taken care by the national auditor, there is no misuse of funds.

“As per the information provided by the Reserve Bank of India, above Rs 210 crore were collected from scheduled banks till February, while Rs 43.50 crore additional contributions were deposited by the banks,” the official said.

The corpus fund of the Trust is spent in accomplishing the objectives of Swavlambam Health Insurance Scheme, which was launched on October 2, 2015. The scheme provides health insurance cover of upto Rs 2 lakh per annum as family floater, family being self, spouse and two children. 

Under the scheme only 10 per cent contribution is paid by the beneficiary and rest is borne by the Trust fund.