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Loan moratorium update: Supreme Court to resume hearing on September 28

The SC bench, led by Justice Ashok Bhushan, was hearing petitions seeking waiver of accruing interest and extension of the six-month loan moratorium period allowed by the Reserve Bank of India (RBI)

twitter-logoBusinessToday.In | September 10, 2020 | Updated 12:54 IST
Loan moratorium update: Supreme Court to resume hearing on September 28
The Supreme Court (SC) deferred the hearing on a batch of pleas seeking interest waiver during the loan moratorium period to September 28

The Supreme Court (SC) on Thursday, said that it will resume hearing on petitions seeking an interest waiver during the loan moratorium period on September 28. The top court also ruled that its order asking banks not to declare the accounts as NPAs (non-performing assets) for two months will continue.

The SC bench, led by Justice Ashok Bhushan, was hearing petitions seeking waiver of accruing interest and extension of the six-month loan moratorium period allowed by the Reserve Bank of India (RBI).

The apex court after hearing the arguments from all the parties, and recording the submissions of the petitioners directed the Centre to file a detailed affidavit within two weeks and posted the matter for further hearing after the said duration (two weeks).

Also Read: Loan restructuring, moratorium should happen simultaneously, says former Chief Statistician Pronab Sen

The top court also observed that banks should not downgrade credit ratings and maintain status quo till further hearing (on September 28).

Solicitor General Tushar Mehta, appearing for the government, assured the court that the Centre is holding discussions at levels much higher than the RBI.

Mehta also urged the SC to be wary of passing orders in a hurry that would have major implications, adding the Centre is looking at providing wider relief across sectors.

The apex court had earlier said that there is "no merit charging interest on interest". The RBI had on June 4 said that banks will lose Rs 2 lakh crore if interest is waived during the (loan) moratorium period.

Senior advocate Rajiv Dutta, who appeared for a petitioner, on September 2 said that the banks charging interest on interest was wrong and they could not charge it.

Also Read: How banks will restructure your home and auto loans

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