New Delhi: The Supreme Court on Friday ordered the government to ensure that all necessary steps are taken to implement its decision to waive interest on eight specific categories of loans paid up to two million rupees in view of the coronavirus pandemic .
A bank headed by Judge Ashok Bhushan said that the COVID-19 pandemic has not only caused a serious threat to people’s health, but has also overshadowed the economic growth of the country and other countries around the world.
What are the eight loan categories?
The eight categories of loans are as follows:
MSMEs (micro, small and medium enterprises)
Education
accommodation
Long-lasting consumption
Credit card
Car
Personal
Consumption
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. The reasons concerned 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.
The high court ruling came in a PIL filed by Agra resident Gajendra Sharma seeking instructions to declare the notice dated March 27, 2020 issued by the Reserve Bank of India as ultra vires to the extent that charges interest on the loan amount during the forbearance period.
It should be recalled that in October, the Center informed the Supreme Court that lenders were ordered to credit the accounts of eligible borrowers before November 5 the difference between compound interest and simple interest charged on loans up to Rs 2 crore during the RBI Loan Forbearance Scheme.
The Finance Ministry has said that after crediting this amount, credit institutions would claim reimbursement from the central government.
In an affidavit filed in the superior court, the government has said that the ministry has issued a scheme under which lending institutions would credit this amount to borrowers’ accounts during the 6-month loan default period that was later announced. of COVID-19. pandemic situation.
Under the scheme, all lending institutions (as defined in clause 3 of the scheme) will credit the difference between compound interest and simple interest in the respective accounts of eligible borrowers for the period between March 1, 2020 and on August 31, 2020, the affidavit. said.
On October 14, the supreme court had observed that the Center should implement “as soon as possible” the waiver of interest on loans of up to 2 million rupees under the RBI moratorium scheme and had said that the common man’s Diwali is in. hands of the government.
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