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Loan Moratorium: Supreme Court resumes case hearing; may pass formal order

The three-judge SC bench led by Justice Ashok Bhushan, is expected to pass a formal order in the interest waiver case on November 5

twitter-logoBusinessToday.In | November 5, 2020 | Updated 12:00 IST
Loan Moratorium: Supreme Court resumes case hearing; may pass formal order
The pleas, filed before the Supreme court, seek an extension of the loan moratorium as well as waiver of interest on term loan EMIs during the six-month moratorium period

The Supreme Court (SC), on Thursday, November 5, resumed hearing in the interest waiver case. The top court was to hear the matter on Tuesday, November 3 but deferred it until November 5 due to the unavailability of Solicitor General Tushar Mehta.

The SC has resumed the hearing of a batch of petitions relating to charging of interest on interest by banks on EMIs (equated monthly installments) not paid by the (loan) borrowers who availed of the RBI loan moratorium scheme, from March 1 to August 31, in the wake of the COVID-19 pandemic.

The pleas, filed before the top court, seek an extension of the loan moratorium as well as waiver of interest on term loan EMIs during the six-month moratorium period.

Also Read: Loan moratorium: Supreme Court adjourns hearing to November 5

The three-judge SC bench led by Justice Ashok Bhushan, is expected to pass a formal order in the case today (November 5).

The bench had postponed the matter after a request was put forward by Solicitor General Tushar Mehta on November 3, that the hearing in the case be deferred as he had to appear before another bench in other matter related to the Central Vista Project.

The RBI and the Finance Ministry have already filed separate additional affidavits in the apex court saying that the banks, financial and non-banking financial institutions will credit into the accounts of eligible borrowers by November 5 the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme period.

Also Read: Banks told to credit 'interest on interest' to borrowers, RBI tells SC

A letter seeking deferment of the hearing in the case was also circulated by advocate-on-record Anil Katiyar for the Centre to the parties and the bench.

The top court acceded to the request and adjourned the hearing on pleas, including the one filed by Gajendra Sharma, on November 5.

Earlier, the RBI had filed an affidavit saying that it had asked all banks, financial and non-banking financial institutions to take "necessary actions" to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme.

Also Read: Loan moratorium 'extendable' up to 2 years: Govt to SC

Prior to this, the central government had told the apex court that lenders had been asked to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the RBI's loan moratorium scheme by November 5.

The government had said that the ministry had issued a scheme as per which the lending institutions would credit this amount into the accounts of borrowers for the 6-month loan moratorium period, which was announced following the COVID-19 pandemic situation.

On October 14, the apex court observed that the Centre should implement "as soon as possible" the interest waiver on loans of up to Rs 2 crore under the RBI's moratorium scheme and had said that the common man's Diwali is in the government's hands.

The RBI had, on March 27 issued the circular which allowed lending institutions to grant a moratorium on payment of installments of term loans falling due between March 1, 2020, and May 31, 2020, due to the pandemic. The moratorium was later extended until August 31 this year.

Also Read: 'Not possible to give more relief, no extension of loan moratorium': Centre tells Supreme Court

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