The Supreme Court today gave the government two more weeks “to come up with something concrete, to help borrowers ease their EMI burden by using an optional moratorium on repayment of loans allowed during the coronavirus crisis.” What is going to happen in two weeks? .. We are giving the center time, but let us make a concrete decision, “a bench of three judges of the high court told the government. This is the last chance for the Center and the RBI to draw up a plan to address the issues, said the Supreme Court, refusing to postpone the case further. The Supreme Court was hearing a batch of petitions seeking a waiver of interest on deferred EMI during the moratorium period, which was introduced by the Reserve Bank of India to ease the burden on borrowers from restrictions related to the coronavirus pandemic.
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The Center told the high court that the matter is being considered at the highest level. The government is consulting with banks and other stakeholders for help, and two or three rounds of meetings have been held and concerns are being examined, he told a three-judge Supreme Court tribunal.
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The extension of social assistance to borrowers will be made on the basis of the data, said the highest court, which would take the case to hearing in the last week of September.
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The previous order on the standard accounts of borrowers who choose not to declare the moratorium as non-performing loans will continue, the court, which includes Justices Ashok Bhushan, R Subhash Reddy and MR Shah, said via video conference.
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To alleviate stressed borrowers a bit, the Supreme Court ruled last week that the loan accounts of borrowers who file for the default, or a delay in loan repayments, will not be reported as bad loans until new orders are given.
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Borrowers must be protected and banks must not take any enforcement action against them, the high court had held.
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Several associations representing sectors such as banks and property developers are part of the hearings.
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While the petitioners have demanded a waiver of interest on interest (interest in exercising the option to suspend EMI due to COVID-19), the government and the RBI are of the opinion that canceling the interest will weaken banks and affect conditions economic.
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The Center and the RBI say that an interest waiver on deferred EMI would run counter to “basic finance royalties” and would be unfair to those who repaid loans on schedule.
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The high court has been told that the loan moratorium may be extended up to two years due to the coronavirus-related situation.
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The central bank had granted a three-month loan moratorium in March due to the pandemic-induced situation and extended it until August 31, May.
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