Tribune press service
New Delhi, September 1
Amid uncertainty surrounding the loan repayment moratorium program that ended on August 31, the Center and the RBI told the Supreme Court on Tuesday that it could be extended for two years due to the pandemic. of COVID-19.
However, Solicitor General Tushar Mehta told a three-judge panel led by Judge Ashok Bhushan that a formal decision has yet to be made.
On behalf of the Center and the RBI, Mehta said a new affidavit had been filed with the highest court on the matter. “We are in the process of identifying the sectors in difficulty to vary the benefits according to the impact of the blow they have suffered,” he said.
“Please let the Center, the RBI and the Bankers Association work together,” Mehta said
Noting that the economy has contracted by 23% due to COVID19, he said several measures have been taken for the struggling sectors.
The highest court – which hears petitions demanding waiver of interest, or waiver of interest on IMEs suspended during the moratorium – previously said there was no point charging interest on interest.
Now that the case can not delay, the Chamber released it for a new hearing on Wednesday.
“Mr. Mehta, this House is not scheduled to sit tomorrow. We will sit tomorrow only to hear this case,” the court said.
Announced by RBI in March for three months, the loan moratorium is a legal authorization for debtors to defer payment of IMEs. it has been extended for six months until August 31, 2020.
The RBI and the Center argued that a full interest relief was not possible because banks also had to pay interest to depositors.
Noting that everything cannot be left to the banks, the Supreme Court asked the government on June 17 to consider interfering with the question of the interest exemption for the moratorium on loans announced for the containment of COVID -19.
“The central government cannot raise its hand in a sign of helplessness … After announcing the moratorium, it cannot now say that it is between the banks and the customers. If you announced a moratorium, you must make sure that the benefits are given to customers on purpose, “said mentioned.
In response to a PIL filed by Gajendra Sharma, RBI told the court that the forced waiver of interest on term loans would jeopardize the financial health and stability of banks and also harm the interests of debtors.
The bench, however, had said many customers did not take advantage of the moratorium because they knew they were not getting any benefits.
“Our limited concern is to ease the burden on borrowers in these difficult times,” he said, adding that not everything could be left to the banks.
“It’s an irony that thousands of crore were in default on the NPA accounts but you have to charge interest here. We are aware of the issues if interest is not charged, but a pandemic is not a normal situation “, said the bench.
The highest court had asked the Center and the RBI to look into the situation and clarify whether banks could come up with new guidelines for specific sectors such as agriculture, autos, businesses and home loans to that end. respect.
He had investigated whether banks could waive interest on outstanding loans or whether the Center could share the burden.
Previously, the highest court had asked the RBI to examine whether the benefits of its political decisions were passed on to borrowers.