Loan moratorium: Worse than taking a pound of flesh, borrowers tell SC

New Delhi, Sep 02: The Supreme Court was told that when the country is down, the banks want to make a profit. This is worse than taking a pound of flesh, senior advocate, Rajiv Dutta, arguing for the borrowers said.

Last week the court pulled up the Centre for not taking a stand on giving moratorium on charging interest on loan as well as interest on interest during the same period declared during pandemic.

Dutta further submitted that in the United States, the government is pumping money to the citizens. Give me time to restore my finances and stand up on my legs, he also said. He also pointed out that the RBI is not an agent of the banks, but a regulator. I did not default on the loans. Moratorium on EMI was meant as a respite when the cash flow has stopped. How can banks say it is a loss, he also said.

On Tuesday the Centre and RBI told the Supreme Court that the moratorium on loans is extendable by two years. We are in the process of identifying the distressed sectors to vary benefits as per the impact of the hit they have taken, the Centre and RBI told the court through Solicitor General Tushar Mehta.

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When Mehta told the court that an interest on interest during the moratorium can be considered, the Bench said that the aspect of interest cannot be ignored all together. Please be fair the court also said.

Mehta then suggested a meeting of representatives of the Centre, RBI and other banks to come up with a proper solution. The court said that this matter cannot be delayed any further.