INSUBCONTINENT EXCLUSIVE:
The Supreme Court on Wednesday pulled up the central government over the issue of interest waiver on loan EMIs deferred due to the
coronavirus-induced lockdown
The top court directed the government and the Reserve Bank of India to review the matter, saying the issue cannot be left between borrowers
"If the Centre announced a moratorium, it must ensure the benefits are given to customers purposefully," said the Supreme Court bench,
comprising Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah.The top court said the customers have not availed of the moratorium
The government took time to find a way out but "nothing has happened", the bench said."The Centre and the RBI will review the matter Indian
Banks' Association to see if new guidelines can be brought in force for moratorium issue," said the Supreme Court, which will next hear the
case in the first week of August.Representing the central government, Solicitor General Tushar Mehta told the Supreme Court that the plea
for waiver of interest during the moratorium period would risk the financial stability of the banks."Plea for waiver of interest during the
moratorium period would risk the financial stability of the banks and shall put the interests of the depositors in jeopardy
Even banks have to pay interest to depositors therefore waiving interest is not easy," Mr Mehta said.Banks told the Supreme Court they will
have to consider payment deferrals on a case-to-case and sector-to-sector bases.The top court had last week asked the Finance Ministry and
plea filed by Gajendra Sharma of Agra, seeking a direction to declare the portion of the RBI's March 27 notification "as ultra vires to the
extent it charges interest on the loan amount during the moratorium period, which creates hardship to the petitioner being borrower and
creates hindrance and obstruction in 'right to life' guaranteed by Article 21 of the Constitution of India".In March, the RBI had allowed
lenders to offer their customers a moratorium on loans - allowing borrowers to defer their EMIs - for three months to tide over the
financial fallout from the coronavirus pandemic.
