The Centre is “hiding behind the RBI,” the Supreme Court said on Wednesday, and asked it to reply within a week on the issue of interest being charged on instalments which have been deferred under the central bank’s scheme during the moratorium period amid COVID-19 lockdown.
Supreme Court
New Delhi:
“This happened because you locked down the entire country,” the apex court told the Centre while referring to the difficulties in loan repayments. The court had earlier asked the Centre and the Reserve Bank of India (RBI) to review the move to charge interest on EMIs during the moratorium period introduced under the scheme due to the COVID-19 pandemic.
“The Centre has not made its stand clear till now. Ample powers are available with the Centre under the Disaster Management Act. You have to make the Centre’s position clear,” a bench headed by Justice Ashok Bhushan said in a hearing conducted through video conferencing. “Centre is hiding behind the RBI,” said the bench which also comprised Justices R Subhash Reddy and MR Shah. “My Lordships may not say that. We are working in coordination with RBI,” Solicitor General Tushar Mehta said and sought a week’s time for filing response in the case.
The bench said, “You have to tell us your stand on two things -- that is the role of the Centre under the Disaster Management Act and whether the “interest on interest” will be accounted for. Senior advocate Kapil Sibal, appearing for one of the intervenors, said that the loan moratorium scheme is ending on August 31 and it should be extended. The apex court has now posted the matter for hearing on September 1.
‘DON’T CHARGE INTEREST’
- SC had earlier said there was “no merit in charging interest on interest” for deferred loan payment instalments during the moratorium period announced in wake of the pandemic
- On June 4, it had sought the Finance Ministry’s reply on the waiver of interest on loans during the moratorium period
- The top court had said there were two aspects under consideration in this matter no interest payment on loans during the moratorium period and no interest to be charged on interest