SC gives Centre, RBI, banks more time to file reply in loan moratorium case2 min read . Updated: 28 Sep 2020, 11:43 AM IST
- The apex court has told the Centre, RBI, and banks to file a concrete reply by 5 October, clarifying their stand on waiving interest charged during the loan moratorium announced in view of covid
The Supreme Court on Monday adjourned the loan moratorium case till 5 October, granting more time to the Centre, the Reserve Bank of India (RBI) and banks to work together and file a concrete reply on their stand on waiving interest charged during the moratorium period.
Solicitor general Tushar Mehta, for the Centre, submitted before the court that the government is at a very advanced stage in its decision-making process. He sought some more time to place on record the complete details of the actions to be taken by the government, considering all sectors on the issue of loan moratorium.
He also apologized for the delay, and said, "Some things are beyond my control."
Senior advocate Rajiv Dutta, representing the petitioner, opposed the adjournment and argued for that the case to be heard and listed at the earliest.
However, the apex court bench headed by justice Ashok Bhushan took on record Mehta's submissions and allowed the request that more time is needed for the decisions to be placed on record.
The apex court bench, also including justices R. Subhash Reddy and M.R. Shah, was hearing a batch of petitions seeking waiver of interest, or waiver of interest on interest, on suspended EMIs during the extended moratorium period amid the nationwide lockdown due to the covid-19 outbreak.
On 10 September, the court had granted the Centre, RBI and banks two weeks’ time to work together and file a concrete reply on their stand on waiving of interest charged during loan moratorium and related issues. The court also ordered an interim extension of loan moratorium till 28 September, directing banks not to tag any loan as non-performing, till further orders.
Additionally, the court noted in its order that an expert committee had been constituted to look into all issues and that the government will take action.
On 3 September, the court passed an interim direction holding that the accounts not declared as non-performing asset (NPA) as on 31 August shall not be declared as an NPA until further orders. The interim order was extended on the last date of hearing.
The central bank had on 22 May extended moratorium on term loans till 31 August amid the nationwide lockdown due to covid-19. In March, the central bank had allowed a three-month moratorium from paying EMIs and other loans on payment of all term loans due between 1 March and 31 May.
Petitioner Gajendra Sharma submitted in his plea that the interest would continue to accrue during the moratorium, which ultimately the borrower would have to pay. He argued that no interest should be charged during the moratorium because people are facing “extreme hardship". The petition also stated that paying additional interest on top of regular EMIs would be difficult.