Loan moratorium: SC gives Centre one week on new plan

New Delhi, Sep 28: The Supreme Court has allowed the government another week to come up with a plan on loan moratorium.

The court had asked the government to submit its plan on September 28. The hearing has now been deferred to October 5. The Centre told the court that a decision is likely in the next couple of days over charging of interest by banks on instalments, which were deferred during the moratorium period in view of the pandemic.

A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and M R Shah had said that these are challenging times and it is a serious issue as on one hand moratorium is granted and on other hand interest is charged on loans.

The bench was hearing a plea, filed by Gajendra Sharma, in which he has sought a direction to declare the portion of RBI's March 27 notification "as ultra vires to the extent it charges interest on the loan amount during the moratorium period, which create hardship to the petitioner being borrower and creates hindrance and obstruction in 'right to life' guaranteed by Article 21 of the Constitution of India".

Sharma, a resident of Agra, has also sought a direction to the government and the Reserve Bank of India (RBI) to provide relief in re-payment of loan by not charging interest during the moratorium period.