The central government on Tuesday informed Supreme Court that loan moratorium period can be extended by two years as per the RBI’s circular.
The central government on Tuesday informed Supreme Court that loan moratorium period can be extended by two years as per the Reserve Bank of India’s circular. However, on the question of waiving interest on interest during the moratorium period, the government said that let centre, RBI and bankers association sit together to bring a solution on waiving of interest on interest.
Solicitor General Tushar Mehta representing the central government told Supreme Court to allow Centre, RBI and bankers association to discuss and arrive at a solution on issue of waiving interest on interest during the loan moratorium period. He added that, “There are more issues involved, GDP is down 23 per cent and economy is stressed.”
The top court has posted the matter for Wednesday as it did not get the affidavit by the centre stating its stand is yet to reach the judges.
The Supreme Court had last week sought the government’s stand on waiving interest on loan repayments during the moratorium and said it “cannot hide” behind the Reserve Bank of India (RBI).
The moratorium period allowed for by the RBI ended yesterday.
The RBI had informed the court earlier that there cannot be an interest waiver during moratorium on term loan repayment as such a move will put the financial health and stability of banks at risk.
The Supreme Court was hearing a public interest litigation (PIL) for waiving of interest on interest for deferred payments of instalments of loan during moratorium period.