He added that the IBC process has already been suspended since March to prevent companies from going bankrupt. “It will ensure that those who paid during the moratorium are not defrauded,” Mehta said.
During the hearing, the bank noted that credit card users should not receive any benefit from the compound interest exemption, as they are not borrowers. The bank said that credit card users do not have a loan, but are buying.
The Center asked the superior court not to consider further relief for the borrowers.
Mehta cites the Kamath Committee report
Mehta also cited the Kamath Committee report on the restructuring of large loans and stated that a separate mechanism already exists for the restructuring of small loans from credit institutions.
The bank asked Mehta, Weren’t the Kamath committee recommendations intended for large borrowers? Mehta clarified that it was for large borrowers and that they are applicable to loans greater than 1.5 billion rupees. The higher court will continue to hear the matter next week.
The Center’s submissions came in dozens of requests submitted seeking a waiver of interest on interest during the loan default period in the context of the ongoing COVID-19 pandemic.
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