On Loan Moratorium And Interest Payments, Centre's October 1 Deadline
In March, the RBI had granted a 3-month moratorium on loans due to coronavirus (Representational)
Here are the 10 points on loan moratorium deadline:
Today, at the end of a two-week extension, the Centre asked for more time, saying the decision on this "is at an advanced state". The court has given it another week - the next hearing will be on October 5.
The government, however, has to file an affidavit by October 1 to spell out its stand, ordered the three-judge bench of justices Ashok Bhushan, R Subhash Reddy and MR Shah.
In March, the Reserve Bank of India had granted a three-month moratorium on loans due to the covid pandemic. It was later extended it till August 31.
But early in September, the Supreme Court, in response to petitions, asked the government to chart out a course to help borrowers who have not been able to make payments. The petitions had sought waiver of interest for the six-month moratorium period.
"We are giving time to the Centre, but take a concrete decision," the judges had said at a hearing on September 10, making it clear that the government needs to chart its own course and not "hide behind the Reserve Bank".
The court had also said that loan accounts of borrowers choosing to defer loan repayment will not be declared as bad loans till further orders.
The Centre and the Reserve Bank of India have told the court that the loan moratorium can be extended by up to two years on account of the coronavirus-related situation. But there is no clarity on the interest-related situation yet.
The Centre had earlier told the court that waiver of interest on deferred EMIs during moratorium period would be against "the basic canons of finance" and unfair to those who repaid loans as per schedule. The Reserve Bank, however, has come out with a scheme which provides for extension of moratorium for two years to borrowers facing financial constraints.
In September, the government set up a panel to look into the issue of interest being charged by banks on the deferred instalments. The three-member committee, under former Comptroller and Auditor General Rajiv Mehrishi, will make an overall assessment to help the government make informed decision.
The Mehrishi Committee was to measure the impact of coronavirus-related restrictions on economy and the prospect of waiving interest on interest. It was also told to come up with suggestions to help various sections of society and submit its report within a week.