Satya Prakash
Tribune News Service
New Delhi, September 1
Amid uncertainty over loan repayment moratorium scheme that ended on August 31, the Centre and RBI on Tuesday told the Supreme Court that it was extendable up to two years.
Solicitor General Tushar Mehta, however, told a Bench led by Justice Ashok Bhushan that no formal decision had been taken in this regard.
Matter of debate
- Loan moratorium is a legal authorisation to debtors to postpone the payment of EMIs
- However, interest charged by banks on deferred EMIs stirred a row
- Petitions were filed in the SC demanding waiver of interest, or waiver of interest on interest on the suspended EMIs
On behalf of the Centre and RBI, Mehta said a fresh affidavit had been filed in the top court on the issue. "We are in the process of identifying the distressed sectors to vary benefits as per the impact of hit they have taken," he said.
"Please let the Centre, RBI and bankers' association put their heads together," Mehta submitted. Noting that the economy had contracted by 23% due to Covid-19, he said several steps had been taken for stressed sectors. The top court — which is seized of petitions demanding waiver of interest, or waiver of interest on interest on the suspended EMIs during moratorium — had earlier commented that there was no point in charging interest on interest. Maintaining that the matter can't be delayed any further, the Bench posted it for further hearing on Wednesday.
Announced in March for three months, loan moratorium was extended to six months till August 31.
The Centre and RBI maintained that a complete interest waiver was not possible as banks too had to pay interest to depositors.
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