The government informed the Supreme Court on Tuesday that the loan moratorium period can be extended by two years according to a circular from the Reserve Bank of India. That came a day after a moratorium, or temporary relief, on loan repayments allowed to lenders due to the coronavirus pandemic ended. The central bank 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.
Attorney General Tushar Mehta, representing the central government, asked the high court to allow the Center to discuss the matter with the central bank and the bankers’ association and reach a solution on the waiver of interest during the loan moratorium period. . “There are more problems involved, GDP is down 23 percent and the economy is stressed,” he said.
“The honor can go through that, the matter can be dealt with tomorrow or the day after tomorrow. The interest on the part of the interests, we have discussed it with the RBI officials,” Mehta said.
“I say this with a great sense of responsibility. Harish Salve also spoke with the bankers association. Most of the issues are addressed,” said the Attorney General.
“We also have to listen to the interest in the part of interest,” said Judge MR Shah, one of the judges on the three-judge court hearing the matter. The higher court published the matter for Wednesday, as it did not receive the affidavit from the Center stating its position.
Last week, the Supreme Court had sought the government’s position on waiving interest on loan repayments during the moratorium, saying it “cannot hide” behind the RBI.
The RBI had previously informed the court that there can be no waiver of interest during the moratorium on repayments of term loans, as such a move would put the financial health and stability of the banks at risk.
A three-judge bench of the Supreme Court headed by Justice Ashok Bhushan was listening to two submissions brought by Gajender Sharma and attorney Vishal Tiwari seeking to extend the moratorium period to help borrowers defer payment of EMI on term loans. in the middle of the pandemic.
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