SC notice to govt, RBI in plea seeking interest waiver during moratorium1 min read . Updated: 26 May 2020, 02:22 PM IST
- The apex court bench sought their response within a week
- The case is likely to be listed next week
NEW DELHI: The Supreme Court on Tuesday issued notice to the Reserve Bank of India and the Centre on a plea seeking interest waiver on the moratorium on term loans given by banks amid the nationwide lockdown due to the covid-19 outbreak.
The apex court bench, comprising Justices Ashok Bhushan, SK Kaul and MR Shah, ordered RBI to file response within a week. The case is likely to be listed next week.
The RBI had on 22 May extended moratorium on term loans till 31 August. In March, the central bank had allowed a three-month moratorium on payment of all term loans due between 1 March and 31 May.
Senior advocate Rajiv Dutta, appearing for the petitioner, urged the court to direct banks not to add interest during the extended moratorium period.
Petitioner Gajendra Sharma said during the three-month period the interest would continue to accrue during the moratorium, which ultimately the borrower would have to pay. The petitioner 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.
Term loans include loans on purchase of vehicles and home, personal loans, agricultural term loans as well as crop loans. The central bank later clarified that credit card dues will also be eligible for the moratorium. The moratorium is for both interest as well as principal repayment.