The Supreme Court today allowed the government one more week to draft a loan default plan to ease the financial burden on borrowers during the coronavirus crisis. The high court, which had asked the government to present its plan on September 28, postponed the hearing until October 5 after the government requested more time. The three-judge bench of the Supreme Court was listening to a batch of petitions seeking a waiver of interest on deferred EMIs during the moratorium period, which was introduced by the Reserve Bank of India (RBI) to ease the burden on existing borrowers in the wake of the coronavirus pandemic. -related restrictions.
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“Some things are out of my control,” Attorney General Tushar Mehta, who represents the Center and the RBI in the case, told the Supreme Court, seeking more time to present the government’s plan.
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The decision on the matter is at an advanced stage and it takes a little more time to present the details to the court, the center’s lawyer told the Supreme Court.
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In its order of September 10, the superior court ordered the government to present the plan detailing the compound interest to be charged and any resulting impact on the credit ratings of borrowers, stating that the plan must be presented at the hearing on September 28. .
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The center has established a panel of experts, under former Comptroller and Auditor General (CAG) Rajiv Mehrishi, to analyze the issue of interest charged by banks on deferred fees during the moratorium period due to the COVID-19 pandemic. .
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In some relief for stressed out borrowers, the Supreme Court had ruled earlier this month 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 submitted.
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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 are demanding a waiver of interest on interest (interest in exercising the option to suspend IMEs due to COVID-19), the government believes that canceling interest will weaken banks and affect economic conditions.
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The center and the Reserve Bank of India have told the high court that the loan moratorium may be extended up to two years due to the situation related to the coronavirus.
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The Reserve Bank of India (RBI) had granted a three-month loan moratorium in March due to the pandemic-induced situation, then extended it until August 31 in May.
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