SC hearing on loan moratorium LIVE updates | Supreme court is hearing petitions seeking interest waiver on the six-month loan EMI moratorium that was allowed by the RBI.
The Supreme Court (SC) is hearing on a batch of petitions seeking interest waiver on loan moratorium granted by Reserve Bank of India (RBI).
A bench of Justices Ashok Bhushan, R. Subhash Reddy & MR Shah is hearing the petitions.
Also read: Loan moratorium ends: What should borrowers do now?
Solicitor General Tushar Mehta to SC:
> Impact of COVID is faced by everyone but the impact is different for every sector. Impact is good also on sone sectors like Pharma sector, IT sector, (Inputs from legal news website Bar & Bench)
> The idea of the moratorium was to defer repayment to ease the burden caused by COVID and lockdown so that business can manage working capital. The idea was not to waive off interest. The effort is that those who are affected by COVID and facing distress get the benefit and those who are defaulters are not able to take benefit.
> Accounts that do not become NPAs on September 1 (after the moratorium ends).
> The expert committee will come up with sector specific guidelines on September 6
Also read: Interest waiver on moratorium loans: Waiver or not, someone is bound to get hurt
SC observations:
> "The main grievance of the petitioners is that they have not been given the adequate relief and the NDMA under the Disaster Management Act (DMA) has not been active to give relief," says Justice Ashok Bhushan. (Inputs from legal news website Bar & Bench)
Here's a quick recap of what's happened so far:
The SC has previously said there is "no merit in charging interest on interest".
The RBI had on June 4 said lenders will lose Rs 2 lakh crore if interest is waived during the moratorium period.
Senior Advocate Rajiv Dutta, who appeared for a petitioner, on September 2 said "interest on interest is absolutely and prima facie wrong and they cannot charge it".
The RBI had in March announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The move was intended to provide borrowers relief during the COVID-19 pandemic.(This is a developing story. Please check back for updates.)