Loan moratorium: Aspect of interest can’t be ignored, please be fair, SC tells Centre

New Delhi, Sep 01: The Centre and Reserve Bank of India have informed the Supreme Court that the moratorium on loans is extendable to 2 years.

We are in the process of identifying the distressed sectors to vary benefits as per the impact of the hit they have taken, the Centre and RBI told the court through Solicitor General Tushar Mehta.

When Mehta told the court that an interest on interest during the moratorium can be considered, the Bench said that the aspect of interest cannot be ignored all together. Please be fair the court also said.

Mehta then suggested a meeting of representatives of the Centre, RBI and other banks to come up with a proper solution. The court said that this matter cannot be delayed any further. While fixing the hearing date for tomorrow, the Bench said that this would be the only case that it would hear.

On Wednesday, the court pulled up the Centre for not taking a stand on giving moratorium on charging interest on loan as well as interest on interest during the same period declared during pandemic.

"You make your stand clear. You can not say anything. It is your responsibility to take steps under the Disaster Management Act. You have enough powers to decide the issue of waiver. You cannot just depend on the RBI," a bench comprising Justices Ashok Bhushan, R Subhash Reddy and M R Shah said.

"This isn't the time to take care of only the business interests but you must also consider the plight of the people. That's how RBI's stands look like and you are not taking any stand at all," the top court observed.

"There are two issues here. Whether any interest should be charged and whether any interest on interest should be charged during the moratorium period," it said.

The apex court granted time to the government after Solicitor General Tushar Mehta sought a week's time to file a response.

"My Lordships may not say that. We are working in coordination with RBI," Mehta said.