SC declines to extend six months moratorium period beyond August 31, 2020

Supreme Court says waiver of complete interest is not possible as it affects depositors.

On Tuesday, 23 March, Justice MR Shah read out judgement on loan moratorium case in Supreme Court. While reading out judgement on loan moratorium case, Justice Shah said, “We have heard the respective parties in the case. It is neither in the domain of scope nor judicial review.”

Justice Shah further stated, “Court won’t debate academic matters of trade and commerce. Not for us to decide if public policy could have been better. The government has its own constraint to handle the issue.”

The apex court refused to interfere with the government and RBI’s loan moratorium policy, and also declined to extend the six months loan moratorium period beyond August 31, 2020. Supreme Court says waiver of complete interest is not possible as it affects depositors.

Supreme Court also stated that Waiver of complete interest is not possible because they have to pay interest to depositors like account holders and pensioner.

 

On 27th March 2020, the Reserve Bank of India (RBI) had announced a loan moratorium scheme, which allowed lending institutions to grant a temporary relief to borrowers on payment of installments of term loans falling due between March 1, 2020, and May 31, 2020, due to the pandemic and the consequent downturn in economic activities.

This steps was taken to give more time to loan borrowers to pay EMI , without considering the loan as bad loan.

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