Loan moratorium case: SC asks Govt about the delay in compound interest waiver

Adjourning the matter till November 2, the top court said it hopes that the government will act by then.

The Supreme Court on Wednesday questioned the government over its delay in the implementation of a waiver on “interest on interest” while hearing petitions on whether banks should charge compound interest from borrowers during the moratorium period.

The apex court asked the Centre why it was delaying the implementation when it has already decided to waive off compound interest on loans up to Rs 2 crore and told to implement the interest waiver scheme at the earliest.

 

Adjourning the matter till November 2, the top court said it hopes that the government will act by then.

Earlier this month, the Centre had agreed in the Supreme Court to waive compound interest charged on loans of up to Rs 2 crores for a six-month moratorium period announced due to the COVID-19 pandemic.

It said the government will seek due authorisation from parliament for making appropriate grants in this regard and “the endeavour shall be over and above the support of Rs 3.7 lakh crore to MSMEs, Rs 70,000 crore for home loans etc. already extended through the Garib Kalyan and Aatma Nirbhar packages announced by government earlier”.

Prior to this, in the matter, the Centre had told the top court that waiver of interest on deferred EMIs during moratorium period would be against “the basic canons of finance” and unfair to those who repaid loans as per schedule.

Last week, the Reserve Bank of India (RBI) told the Supreme Court that continuation of the loan moratorium period beyond the six months already granted may affect overall credit discipline and small borrowers will eventually feel the pinch.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

Source: Read Full Article