Loan Moratorium: SC asks Centre to implement 'interest waiver' scheme at the earliest

Loan Moratorium: SC asks Centre to implement 'interest waiver' scheme at the earliest

The Supreme Court today directed the Centre to implement the interest waiver scheme at the earliest while hearing a batch of petitions seeking interest waiver during the loan moratorium.

The three judge bench comprising of Justices Ashok Bhushan, R Subhash Reddy & M.R. Shah asked Solicitor General Tushar Mehta as to when the decision will be implemented to which it was replied that there was diversity in lending and different modalities are required to be followed. He also added that consultations are on between the required stakeholders. The bench also added that although the Government was always permitted to take as much time as they required to come with the instructions for implementation, but it was not in the interest of the common man to continue delaying the implementation.

The Court said that the government must not delay the implementation any further to which the SG replied, "November 5 is the outer limit for implementation but the government will try to implement it even earlier than that".

The Bench said that it will adjourn the matter went to 2 November and asked the Government to inform the Court about the implementation of the said benefits.

It may be recalled that on October 3, the Central Government had informed the court that the Banks have decided to waive the interest on interest and then will be compensated by the Government and the calculation will have different modalities. "We will have to ensure that bank gives us a proper format," said Solicitor General Tushar Mehta to the apex court.

In the month of March, the Reserve Bank of India (RBI) had announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The intention was to provide borrowers relief during the COVID-19 pandemic and to give them more time to clear payments of EMIs amid the economic fallout of the lockdown.

The Supreme Court on 3 September passed an interim direction holding that the accounts not declared NPA as on 31 August shall not be declared as NPAs till further orders.

On October 10, the RBI informed the Supreme Court that if the stay on NPA account classification is not lifted immediately, it shall have huge implications for the banking system, apart from undermining the regulatory mandate of the RBI.

The Court will hear the matter on 2nd November, 2020.