The Supreme Court (SC) said on Monday that the affidavit presented by the Center on October 2 on the exemption of compound interest on defaulted loans after the coronavirus disease (Covid-19) does not address several issues raised by various petitioners. and asked the government and the Reserve Bank of India (RBI) authorities to submit a revised response by October 13.
An SC bench of three judges, led by Judge Ashok Bhushan, noted that the Center’s affidavit is silent on the sector-specific measures recommended by the KV Kamath Committee report on September 7, and did not share details about the measures. taken for the implementation of their own policy decisions.
“The affidavit does not address various issues raised in various petitions,” the court, which also includes Justices R Subhash Reddy and MR Shah, noted in its order.
The court was hearing petitions seeking the waiver of interest on equivalent monthly installment (EMI) payments between March and August 31, which was announced by RBI due to the Covid-19 pandemic and lockdown restrictions from 68 days nationwide that were applied from March 25 in an attempt to contain the viral outbreak.
The court asked the central government and the RBI to record various policy decisions and guidelines taken by him to implement his plans.
The Center in its affidavit had said that small borrowers, who borrow up to Rs 2 million, would get relief from compounding interest payments during the six-month moratorium period.
An undersecretary of the Department of Financial Services of the Ministry of Finance submitted the affidavit on behalf of the central government.
The compound interest exemption during the six-month moratorium period between March 1 and August 31 will be available for the following loan categories, such as education, housing, consumer durables, credit card installments, auto, personal , consumption and also the loans of micro, medium and small companies (MIPYME).
However, the exemption will not apply to loans that exceed Rs 2 million.
Many of the petitioners objected to the fact that the affidavit was silent on the exemption that would be granted to various sectors.
On September 7, the KV Kamath Committee had presented the report, where it had identified 26 sectors for loan restructuring.
“There is no relief for the real estate sector. We have not been offered loan restructuring, ”said senior attorney Aryama Sundaram, who represented the Confederation of Real Estate Developers Associations of India (CREDAI), a leading organization representing more than 11,940 real estate developers in the country.
The high court also detained the central government and RBI authorities for failing to share details on the steps taken to implement their own political decisions.
“The Center and the RBI should issue orders in an attempt to inform the public about the benefit that has been extended,” the bank said.
Senior attorney V Giri, who represented RBI, assured the SC that it would be done.
“When will it be done? You’ve been saying it will be done. It’s been going on for a long time, ”Judge Shah replied.
The SC listed the case for the next hearing on October 13, when the Center and the RBI are expected to present a revised response regarding the KV Kamath Committee’s recommendations and also about the steps taken by the authorities regarding implementation. of their own political decisions.
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