SC gives Center, RBI and banks more time to file response in loan moratorium case

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The Supreme Court on Monday adjourned the loan moratorium case until October 5, giving the Center, the Reserve Bank of India (RBI) and the banks more time to work together and file a concrete response to their position. on the waiver of interest received during the moratorium period. .

Solicitor General Tushar Mehta, for the Center, argued in court that the government is at a very advanced stage in its decision-making process. He asked for a little more time to record full details of what action the government should take, considering all sectors on the issue of the loan moratorium.

He also apologized for the delay and said, “Some things are beyond my control.”

Lead counsel Rajiv Dutta, representing the claimant, opposed the adjournment and pleaded for the case to be heard and entered as soon as possible.

However, the bench of the Supreme Court led by Judge Ashok Bhushan took note of Mehta’s submissions and allowed the request that more time is needed for decisions to be recorded.

The Supreme Court, also comprising Justices R. Subhash Reddy and MR Shah, heard a batch of petitions asking for waiver of interest, or waiver of interest on interest, on IMEs suspended during extended moratorium period amid lockdown national due to the covid -19 outbreak.

On September 10, the court gave the Center, the RBI and the banks two weeks to work together and file a concrete response on their position on waiving interest earned during the loan moratorium and related issues. The court also ordered a temporary extension of the moratorium on loans until September 28, instructing banks not to mark any loans as non-performing until further notice.

In addition, the court noted in its order that a committee of experts had been formed to consider all issues and that the government would take action.

On September 3, the court adopted an interim instruction stating that accounts not reported as non-performing assets (NPA) as of August 31 will not be reported as NPA until further notice. The interim order was extended on the last hearing date.

On May 22, the central bank extended the moratorium on term loans until August 31 as part of the nationwide lockdown due to covid-19. In March, the central bank authorized a three-month moratorium on payment of IMEs and other loans on the payment of all term loans due between March 1 and May 31.

Petitioner Gajendra Sharma argued in his plea that interest would continue to accrue during the moratorium, which the borrower would ultimately have to pay. He argued that no interest should be charged during the moratorium because people are facing “extreme hardship”. The petition also stated that it would be difficult to pay additional interest on top of regular IMEs.

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