On Tuesday, the Supreme Court issued notice to the Reserve Bank of India (RBI) and have requested a reply on a plea seeking to waiver interest on loans during the moratorium period announced by the central bank.
Earlier, the RBI had declared a three-month moratorium on all term loans owing to the pandemic-induced lockdown. Further, the moratorium period is for three more months. While this gave borrowers defer from loan payments for a specific time and has given some relief, it still does not provide a discount on interest payment. Nevertheless, the debtor’s accounts and their credit statements will not come under Non-Performing Assets (NPA).
On March 27, the RBI issued a notice to various financial institutes to allow the customers to get a moratorium period on their loan installments due between March 1 and May 31. However, the moratorium period is now till August 31 after the lockdown extension.
In addition, the interest which is chargeable during the moratorium period would later be added to the loan installments that will commence after the given three months. This would mean an extreme interest burden on the debtors. To clarify, this interest has been challenged in the plea.