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SC on Loan Moratorium | Supreme Court to resume hearing interest waiver petitions on November 19

SC on Loan Moratorium: The three judge bench comprising of Justices Ashok Bhushan, R. Subhash Reddy & MR Shah adjourned the case to today

November 18, 2020 / 01:57 PM IST
Supreme Court of India

Supreme Court of India

The Supreme Court will hear a batch of petitions seeking interest waiver during the loan moratorium period on November 19. The case was listed for November 18 (today), but the apex court adjourned the matter, Bar&Bench reported.

The three-judge bench comprising of Justices Ashok Bhushan, R Subhash Reddy and MR Shah had earlier assembled on October 14, but adjourned the case till November 2. During proceedings on October 13, Justice Bhushan said that once the government has taken a decision, there wouldn't be any need to delay it further and the apex court will pass an order.

The RBI had in March announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The move was intended to provide borrowers relief during the COVID-19 pandemic and expected to give them more time to clear payments of EMIs amid the economic fallout of the lockdown, without being classified as NPAs.

On June 4, the central bank said lenders will lose Rs 2 lakh crore if interest is waived during the moratorium period. In its annual report, the central bank also said the moratorium on loan repayments could have an impact on the financial health of banks.

The case so far:

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>> The three judge bench comprising of Justices Ashok Bhushan, R Subhash Reddy & MR Shah is hearing the case.

>> The RBI had in March announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The move was intended to provide borrowers relief during the COVID-19 pandemic and expected to give them more time to clear payments of EMIs amid the economic fallout of the lockdown, without being classified as NPAs.

>> The SC had on September 3 instructed banks not to declare accounts as non-performing assets (NPAs) until further orders after the Centre on October 2 told the apex court that it would waive compound interest on the repayment of loans of up to Rs 2 crore, a move that would provide relief to individual and MSME borrowers.

>> The SC has previously said there is "no merit in charging interest on interest".

>> The RBI had on June 4 said lenders will lose Rs 2 lakh crore if interest is waived during the moratorium period. In its annual report, the central bank also said the moratorium on loan repayments could have an impact on the financial health of banks.

>> The bench on October 5 heard pleas seeking waiver of accruing interest during the six-month loan moratorium period. The apex court granted Centre and the Reserve Bank of India (RBI) time to file additional affidavits.

>> The Supreme Court on October 14 adjourned its hearing on a batch of petitions seeking interest waiver during the loan moratorium period to November 2, which was further pushed to November 3.

>> The Supreme Court has adjourned its hearing on a batch of petitions seeking interest waiver during the loan moratorium period to November 2. The apex court has directed the government to come back "with an appropriate action."

>> Case was postponed to November 3 for hearing when Judges assembled to hear the interest waiver case. However, Solicitor General Tushar Mehta was unavailable for hearing as he has to appear in the pleas challenging the construction of the new Grand Vista in Delhi. Case has been adjourned to November 5 to accommodate the Solicitor General.

>> After a brief hearing on November 5, the case was adjourned to November 18.

>> Matter adjourned to November 19.
Moneycontrol News
first published: Nov 18, 2020 01:30 pm

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