Moratorium: waive interest on 8 categories of loans, SC told government

The Supreme Court on Friday ordered the government to ensure all measures are taken to implement its decision to waive interest on eight specified categories of loans paid up to two crore rupees due to the coronavirus pandemic .

A bench led by Judge Ashok Bhushan said the COVID-19 pandemic has not only caused a serious threat to the health of the population, but has also cast its shadow on the economic growth of the country as well as other countries in the whole world.

The eight loan categories are MSMEs (micro, small and medium enterprises), education, housing, sustainable consumption, credit cards, automobile, personal and consumer.

“Due to the lockdown imposed by the Indian government in the exercise of powers under the Disaster Management Act 2005, it is undeniable that most companies, including the private and public sectors, have been affected.

“For several months, a large number of industries were not allowed to operate and exemptions were granted only to a few of the industries to manage and continue operations, which were deemed essential and necessary in the de facto situation, “the judiciary, also comprising justices RS Reddy and MR Shah, said.

Although, gradually, due to Unblocks 1, 2 and 3, industries and other business activities have been restored and the country’s economy is on the right track, albeit at a slow pace, he said. declared.

The Supreme Court noted that the moratorium period granted by the Reserve Bank of India continued from March 3 to August 31 for a period of six months.

He noted Solicitor General Tushar Mehta’s submission that the measures taken by the Center in the exercise of its jurisdiction under the Disaster Management Act 2005 to alleviate the hardships and miseries of a few sectors.

As indicated above, Senior Counsel Rajiv Dutta, Counsel for the Claimant, expressed satisfaction with the measures taken by the Government of India to address the Applicant’s grievances to the extent indicated above.

We have this writing with instructions to the Respondents to ensure that all steps are taken to implement the decision …

The RBI had published on March 27 the circular which authorized credit institutions to grant a moratorium on the payment of maturities of term loans maturing between March 1, 2020 and May 31, 2020, due to the pandemic. Later, the moratorium was extended until August 31 of this year.

The pleas concerned the collection of interest by banks on IMEs that were not paid by borrowers after taking advantage of the RBI’s loan moratorium program from March 1 to August 31.

The trial court judgment came on a PIL filed by Agra resident Gajendra Sharma seeking instructions to declare the notification dated March 27, 2020 issued by the Reserve Bank of India as ultra vires as it charges interest on the loan amount during the moratorium period.

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor

Previous How to calculate loan payments and costs
Next Trump's pardon list may include family, celebrities and himself, report says