Loan Moratorium: SC seeks further clarification from Centre, RBI

Tribune News Service

New Delhi, October 5

The Supreme Court on Monday asked the Centre and the RBI to file an additional affidavit bringing on record relevant policy decisions and guidelines consequent to the decision of waiving ‘interest on interest’ charged on loans of up to Rs 2 crore for “most vulnerable” borrowers during the six-month moratorium due to COVID-19.

“The Union of India and the Reserve Bank of India may also file counter affidavit in other writ petitions where certain additional issues have been raised,” a Bench headed by Justice Ashok Bhushan said, adding, they should also give their response with regard to different sectors’ grievances highlighted by different writ petitioners.

The Bench gave a week to all stakeholders to respond to Centre's affidavit that sought to waive ‘interest on interest’ charged on loans of up to Rs 2 crore, irrespective of whether they availed of the moratorium or not.

The top court also asked the government to produce the Kamath Committee Report and posted the matter for further hearing on October 13.

The order came after counsel representing individual petitioners, banks and the real estate sector sought time to file their response.

During the hearing, the Bench pointed out that the Centre’s affidavit didn't deal with several issues arising in the case and no consequential circular had been issued either by the RBI or any other authority.

"Our earlier order was for filing of the affidavit along with the decisions taken by the RBI and different banks," the Bench said while asking the government and the RBI to indicate the same in the additional affidavit to be filed within a week.

As Solicitor General Tushar Mehta, representing the Centre, said compound interest waiver would put an extra burden of several lakh crore on the government, CREDAI counsel complained that no loan restructuring had been given to the Real Estate sector and from September 1 builders would have to pay full interest on loans.

The Finance Ministry had said the concession would be given to eight categories, including housing, education, MSMEs, consumer durable, credit card dues, auto, personal, and consumption loans, irrespective of whether a borrower availed of moratorium or not.