The moratorium period on repayment of loans can be extended by two years as per the RBI’s circular, informed the Supreme Court. The extension is allowed on the grounds of the ongoing Covid19 crisis.
The Reserve Bank of India had earlier allowed banks and other financial institutions to offer a six-month moratorium to all existing individual and corporate term loan borrowers untill August 31.
The interest on interest part, we have discussed with the RBI officers.
Solicitor General Tushar Mehta, told the supreme court that discussions were going on with the central bank and the Bankers association to arrive at a solution on the issue of waiving interest on loans due during the moratorium period. The lordship may go through it, the matter may be taken up tomorrow or day after tomorrow.
Harish salve also spoke with the banker’s association.
We have also to hear the interest in interest part also, said justice MR Shah, one of the judges. The top court will take up the case again on Wednesday.
The supreme court had last week sought the government’s stand on waiving interest on loan repayments during the moratorium, saying it “cannot hide” behind the RBI.
The RBI had informed the court earlier that there cannot be interest waiver on term loans as the financial health and stability of banks would be at risk.
A bench headed by Justice Ashok Bhushan was hearing petitions filed by Gajender Sharma and lawyer Vishal Tiwari seeking to extend the moratorium period to help borrowers in deferring their EMI payment on term loans amid the pandemic.