The central government on Tuesday informed Supreme Court that loan moratorium period can be extended by two years as per the RBI's circular.
The government on Tuesday told the Supreme Court that the moratorium on repayment of loans should be allowed during the coronavirus crisis and it can be extended by two years. It came a day after the government’s deadline, when temporary relief on loan repayments ended. The Reserve Bank of India had allowed banks and other financial institutions to offer a six-month moratorium to all existing individual and corporate term loan borrowers until August 31.
Solicitor General Tushar Mehta, representing the government, told the Supreme Court that discussions were going on with the central bank and the bankers’ association to waive the interest on loan dues issues during the moratorium period. “There are more issues involved, GDP is down 23 percent and the economy is stressed,” said the government lawyer.
“The lordship may go through it, the matter may be taken up tomorrow or day after tomorrow. The interest on interest part, we have discussed with the RBI officers,” Mr Mehta said. “I am saying with a great sense of responsibility. Harish Salve also spoke with the bankers’ association. Most of the issues are addressed,” the Solicitor General said.
Most Read: Need To Prevent Diabetes? Here Are The 6 Things To Eat That Controls The Disease
The central government also apprised the bench that it has filed an affidavit stating that the National Disaster Management Authority has brought forth the issues and sent its ‘Views and Recommendations’ to RBI.
The affidavit also states that ”ex post facto change in the terms and conditions of the offer of moratorium favouring those who availed of it over those who made the extra effort of repaying as per schedule would be grossly inequitable and patently unfair for those who did not avail of the benefits of moratorium initially or gave it up subsequently.”
The loans include all kinds of retail products, such as vehicle, home, personal loans, agricultural, and crop loans. The central bank clarified that credit card dues will also be eligible for the moratorium.
During moratorium the customer does not have to pay EMIs and no penal interest is charged. It is not a concession, but a deferment of payment to provide some relief to borrowers facing liquidity issues.
On 26 August, the apex court had lashed out at the Centre for not filing an affidavit in time with respect to its powers to waive interest entirely, or the interest accrued during the moratorium. The Centre had to clarify its position under DMA.
Most Read: Twitter Removes Trump Video Featuring ‘Electric Avenue’ After Copyright Violation Complaint
