Loan Moratorium: SC gives one week to stakeholders to respond to Centre’s affidavit

New Delhi: The Supreme Court on Monday gave a week to stakeholders to respond to Centre’s affidavit that sought to waive ‘interest on interest’ charged on loans of up to Rs 2 crores for “most vulnerable category of borrowers” for the six-month moratorium announced by RBI given COVID-19.

The top court said it wanted the government to produce the Kamath Committee Report for further hearing on October 13.

Banks Association said it needed time to respond to the Centre’s affidavit.

The Government’s affidavit filed in the top court last week said eight categories of borrowers will not be charged compound interest on loans up to Rs two crore, irrespective of whether they availed of the moratorium or not.

A Bench headed by Justice Ashok Bhushan pointed out that the affidavit didn’t deal with several issues arising in the case and no consequential circular had been issued either by the RBI or any other authority.

It said the recommendations made by the Kamath Committee had to be considered and the report needed to be circulated to the needy persons.

“Our earlier order was for filing of the affidavit along with the decisions taken by RBI and different banks,” the Bench said.

As Solicitor General Tushar Mehta, representing the Centre, sought time to further file an affidavit in the case, the Bench said, “We allow one week time to RBI and Centre and banks.”

CREDAI counsel said that no loan restructuring had been given to Real Estate sector and from September 1 builder have to pay full interest on loans.

The Finance Ministry said the concession would be given to eight categories including housing, education, MSMEs, consumer durable, credit card dues, auto, personal, and consumption loans, irrespective of whether a borrower availed of moratorium or not.

After careful consideration and weighing all possible options, the government has decided to continue the tradition of “hand holding of small borrowers”, the Centre said even it clarified that the concession wasn’t applicable to loans exceeding Rs 2 crore.

(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)