On Tuesday, the Supreme Court adjourned to November 18 the hearing on a batch of allegations related to the collection of interest on interest by banks on EMIs that were not paid by borrowers who availed themselves of the moratorium scheme of RBI loans in light of the COVID-19 pandemic. Reuters reported.
The Reserve Bank of India and the Ministry of Finance have already filed separate additional affidavits in the supreme court saying that banks, financial and non-bank institutions will credit the accounts of eligible borrowers before November 5 the difference between compound and simple interest charged. in loans up to ₹2 million rupees during the period of the moratorium plan.
The reasons related to the collection of interest on interest by banks on EMIs that have not been paid by borrowers after availing themselves of the RBI loan default scheme from March 1 to August 31.
Previously, the RBI had filed the affidavit saying that it had asked all banks, financial and non-bank institutions to take the “necessary actions” to credit the accounts of eligible borrowers the difference between the compound and the simple interest charged in loans up to ₹2 crore during the moratorium plan.
Prior to this, the central government had told the high court that lenders had been asked to credit eligible borrowers’ accounts for the difference between compound and simple interest charged on loans of up to ₹2 million rupees during the RBI loan default plan before November 5.
The government had said that the ministry issued a scheme under which lending institutions would credit this amount to borrowers’ accounts during the 6-month loan moratorium period that was announced after the COVID-19 pandemic situation.
On October 14, the high court had observed that the Center should implement “as soon as possible” the exemption of interest on loans of up to ₹2 crore under the RBI moratorium scheme and had said that the common man’s Diwali is in the hands of the government.
On March 27, the RBI issued the circular that allowed credit institutions to grant a moratorium on the payment of installments of term loans that expire between March 1, 2020 and May 31, 2020, due to the pandemic. Subsequently, the moratorium was extended until August 31 of this year.
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