India

"Common Man's Diwali...": Top Court Nudge For Loan Relief By November 2

The court has rejected the centre's plea for a month's time to take a call on the interest waivers.

New Delhi:

The Supreme Court today refused to allow the government a month's time to implement the interest waiver on loans of up to Rs 2 crore, asking a decision has already been taken, why should it take so long to execute it. The Centre had argued that it needed the time for certain formalities, but the court set a fresh deadline of November 2.

"The Common Man's Diwali is now in government's hands," said Justice MR Shah, who was part of the three-judge bench.

"The common people are worried. We are concerned with people with loan up to 2 crores," said the bench, which has been pressing the government to figure out a way to give relief to the people who have been unable to repay loans due to the coronavirus-induced lockdown.

The Centre has already said that it would waive the compound interest on loans, which is expected to bring relief not only to individual borrowers but also banks. The government's counsel said it was a "huge burden" but added that they are not "mentioning the figure".

In March, the Reserve Bank of India had granted a three-month moratorium on loans due to the Covid pandemic. It was later extended till August 31. In September, the Supreme Court, in response to petitions, asked the government to chart out a course to help borrowers. A waiver of interest for the six-month moratorium period was also sought by a bunch of petitions.  

Today, the government was expected to spell out the way ahead on an extension of moratorium, waiving of interest, sector-wise relief and its decision on the recommendations of Mehrishi Committee, which was asked to gauge the impact of interest waiver during the Covid-linked moratorium.

But the government sought more time, saying the outer limit for bringing relief to borrowers is November 15.

"When you have taken a decision why it is delayed for one month?" the court responded.

"Our view is one month is not required to implement the decision… The delay is not in the interests of common man… It is a welcome decision to give relief for small people. But some concrete results needed," said the bench comprising justices Ashok Bhushan, R Subhash Reddy and MR Shah.

The Reserve Bank said has said that it is not possible to extend moratorium period as it would affect the banking sector and the economy.

The government has told the court it would waive the compound interest on loans up to Rs 2 crore under a COVID-19 support plan.

It, however, asked the court not to permit any further judicial review saying it would not be possible to supplement the existing relief packages.