The Supreme Court today heard the petitions on one of thefallouts of the pandemic COVID-19 - loan moratorium of “interest on interest”.
Initially, the government had updated its decision toselectively waive off the interest earned on delayed interest payments duringthe COVID-19 moratorium.
The government has earlier denied any such waiver becausedoing so would have hurt the survivability of the banks underwriting the loans.Upon intervention of the Supreme Court, and its guidelines to consider thesituation and help the borrowers, the government came up with a plan.
The RBI, then, in a fresh affidavit filed to the SupremeCourt, claimed that it is unable to extend loan moratorium beyond the six-monthperiod.
The rationale provided is that such a move “may result invitiating the overall credit discipline which will have a debilitating impacton the process of credit creation in the economy”. The RBI further said thatthe move can “increase the risks of delinquencies post resumption of scheduledpayments”
Now, the question is on whether any relief beyond the Rs 2crore is to be given or not.
The Supreme Court today passed over the case for hearing at12 noon while attending to other cases.
The turn of the case came last and at about 2 pm the casewas adjourned for tomorrow.