The plea in the court noted that this imposition of interest during the lockdown period defeats the very purpose of a moratorium on loans.
The Supreme Court on May 8 agreed to hear a plea seeking waiver of interest payment on loans during the moratorium period, CNBC-TV18 reported. A notice has been issued to the government, the Reserve Bank of India (RBI) seeking their reply in the matter within two weeks.
In April, a public interest litigation (PIL) in the apex court challenged the RBI's March 27 circular on the three-month loan moratorium. The circular allowed banks and financial institutions to recover interest accrued on the outstanding portion of the loans during the March to May period of the moratorium.
The plea in the court noted that this imposition of interest during the lockdown period defeats the very purpose of a moratorium on loans. It had sought a direction from the court to all banks and financial institutions to not charge interest on term loans during the moratorium period .
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