The Supreme Court bench comprising of Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah, while hearing a plea challenging the charging of interest on loans even after a three-month moratorium granted by the RBI today slammed the Centre for not taking a stand on allowing moratorium on charging of interest on loans as well as interest on interest during the moratorium period declared during pandemic.
Solicitor General Tushar Mehta, appearing for the central government, submitted that the Centre is working in coordination with the RBI to ameliorate difficulties for those who have availed loans. He told the bench that the Centre’s stand cannot be any different than that of the RBI.
The bench further slammed the Centre and said that even it had ample powers under the Disaster Management Act to decide whether it could stop banks from charging interest on deferred EMIs and stop interest on interest for the moratorium period, the Centre is hiding behind the RBI decision on this issue. The bench thereafter directed the central government to file an affidavit within a week, stating its stand on moratorium on loan repayment, which expires on August 31. It has to decide whether interest can be waived or, whether it can stop charging interest on interest accrued during moratorium period.
The matter has been adjourned for next hearing in September 2020.