The Supreme Court on Thursday allowed the government two more weeks "to come up with something concrete for various sectors" in the loan moratorium matter. "What is going to happen in two weeks? You must come with something concrete for various sectors," the top court's bench told the government. The top court was hearing a batch of petitions seeking a waiver of interest on deferred EMIs during the moratorium period, which was introduced by the Reserve Bank of India (RBI) to ease the burden on existing borrowers in wake of coronavirus pandemic-related restrictions.
The centre told the top court that considerations are taking place at the highest level. The government is in consultation with banks and other stakeholders for relief, and two-three rounds of meeting have taken place and the concerns are being examined, it told a three-judge Supreme Court bench.
In some relief to stressed borrowers, the Supreme Court had ruled last week that loan accounts of borrowers availing the moratorium - or a delay in loan repayments - will not be declared as bad loans till further order.
The borrowers need to be protected and banks should not take any coercive against them, the top court had held.
A number of associations representing sectors such as banks and real estate developers are part of the hearings. While the petitioners demand a waiver of interest on interest (interest for exercising the option to suspend EMIs due to COVID-19), the government is of the view that writing off interest will weaken banks and affect economic conditions.
The Centre and the Reserve Bank of India have told the top court that the loan moratorium can be extended by up to two years on account of the coronavirus-related situation.
The Reserve Bank of India (RBI) had in March granted a three-month loan moratorium due to the pandemic-induced situation, and extended it till August 31 in May.
