The Supreme Court (SC) on December 14 deferred hearing a batch of petitions seeking interest waiver during the loan moratorium period to day after (December 15). It has also granted permission to the Reserve Bank of India (RBI) to submit written submissions, Bar and Bench reported.
A bench comprising of Justices Ashok Bhushan, R Subhash Reddy and MR Shah had deferred the matter of interest waiver to December 14 during the last hearing on December 9.
On the last date, Reserve Bank of India informed the Top Court that borrowers opting for resolution of COVID-related stressed loans shall not be required to submit any specific plans. It also filed an additional affidavit in this regard, Live Law reported.
Solicitor General Tushar Mehta also made submissions on behalf of the Centre, stating that the prayers by specific sectors cannot be entertained under Article 32 Writ Jurisdiction & that it was the government’s prerogative, it said.
Centre had also stated that if banks were to bear the burden of waiving interests vide a blanket order, it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the banks unviable which would mean foregoing an estimated 6 lakh crore, it added.
Here is a round-up of the case so far:
>> 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 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 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 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 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.
>> The matter was adjourned to November 19. The SC disposed petitions where petitioners are satisfied with compound interest waiver. It directed power producers and other petitioners to submit suggestions before RBI counsels. It also directed Centre and RBI to reply to suggestions put forth before the bench.
>> The hearing was taken up on December 8 where after hearing all sides the SC said that "more needs to be done".
>> The hearing was again taken up on December 9. Solicitor General Tushar Mehta told the apex court that granting of the waiver would cause a loss of Rs 6 lakh crore. The court deferred hearing to December 14.
>> Case is listed for hearing on December 14 (today).
Stay tuned for LIVE news and developments on the case.
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