The Indian economy is “stressed,” the central government told the Supreme Court on Tuesday, noting that issues related to charging interest on defaulted loans and interest on such interest require detailed consideration by the Center, the Bank. of the Reserve of India (RBI) and the bankers. Association.
Attorney General Tushar Mehta told the court that the Center, the RBI and the Bankers Association should be able to “put their heads together” and come to a solution.
“There are problems. The economy is stressed. This requires a bit of discussion. What I am suggesting is to allow the Center, the RBI and the Bankers Association to put our heads together. We will have to identify the class of borrowers, sectors, etc. that will be affected, ”Mehta said.
The court was hearing a petition for a waiver of interest charged by banks, citing the relief previously announced by the RBI on the payment of equivalent monthly installments (EMI) between March and August 31 due to the pandemic.
Agra resident Gajendra Sharma’s plea specifically cited the RBI’s March 27 notice announcing a moratorium on loan repayments and allowing banks to charge interest. Sharma contested the notice to the extent that it allowed interest to be charged.
Mehta told the court on Monday that the moratorium period is extendable for two years according to the RBI circular. The moratorium announced by the RBI had expired on August 31.
During the last hearing, the Court had asked the Center to submit an affidavit on the matter rather than relying on the RBI affidavit and “hiding behind the RBI.”
Mehta informed the court that the Union government submitted its affidavit on Monday.
The matter was adjourned for a detailed hearing tomorrow.
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