The Centre on 19 November 2020 told the Supreme that issue pertaining to loan moratorium in view of the COVID-19 pandemic is a fiscal policy matter and the government has taken various proactive steps keeping in mind different sectors.
Union Finance Ministry, the Reserve Bank of India (RBI) and the Centre told the Supreme Court three-Judges bench headed by Justice Ashok Bhushan and Justices R. S. Reddy and M. R. Shah that it is not a case of no action and no further indulgence may be given even if the petitioners say that there could be better option on this issue.
The bench was told by Solicitor General Tushar Mehta that to ask for sector specific reliefs from the Apex court now is perhaps not a remedy available under Article 32 of the Constitution.
The apex court was hearing a batch of petitions relating to charging of interest on interest by banks on EMIs, which were not paid by the borrowers who availed the loan moratorium scheme in view of the pandemic.
The RBI had on March 27 issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between 1 March 2020, and 31 May 2020, due to the pandemic. Later, the moratorium was extended till 31 August 2020 this year.
The RBI and the Finance Ministry have already filed separate additional affidavits in the top court saying that the banks, financial and non-banking financial institutions will credit into the accounts of eligible borrowers by 5 November 2020 the difference between compound and simple interest collected on loans of up to Rs. 2 crore during the moratorium scheme period.
On 5 November 2020, the RBI had urged the apex court to lift its interim order, which held that the accounts not declared as non-performing assets till August 31 this year are not to be declared NPAs till further orders, saying it was facing difficulty due to the directive.
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