Come up With Something Concrete in 2 Weeks: Supreme Court to Centre on Loan Moratorium Plan

The Supreme Court said that it was bound to grant two weeks to the Centre to file an appropriate affidavit but it is not keen on adjourning the case any further.

New Delhi: The Supreme Court of India on Thursday issued a whip to the central government and asked it ‘come up with something concrete’ and consider pleas on not charging interest on deferred EMIs during the moratorium period. The top court also asked the Centre to not downgrade the credit/asset classification of the borrowers.

A bench headed by Justice Ashok Bhushan, R Subhash Reddy and MR Shah asked the union government, Reserve Bank of India as well as the banks to put their heads together and decide on crucial issues – sector-specific loan restructuring, charging of interest on interest, etc – within two weeks.

The Supreme Court said that it was bound to grant two weeks to the Centre to file an appropriate affidavit but it is not keen on adjourning the case any further.

Solicitor General Tushar Mehta, appearing for the government, submitted that an expert committee at the highest level has been set up to make decisions on the issue of moratorium extension, interest on interest during the moratorium and other connected issues.

The SC warned that there will be no further extension and that it will consider different prayers made by petitioners on the next date. The next date of hearing in the matter has been set on September 28.

Earlier this month, the Narendra Modi-led Centre informed the Supreme Court that the moratorium on repayment of loans can be extended by two years in line with the Reserve Bank of India’s (RBI) circular.

“We are in the process of identifying the distressed sectors to decide what kind of relief could be provided, as per the impact of the hit they have taken”, Solicitor General Tushar Mehta, appearing for the RBI and Centre told the SC, clarifying that moratorium is capable of being extended as per the circular.

However, the bench insisted that it will have to take a decision on many other issues on the basis of its merit.

The case relates to a petition in the Supreme Court seeking direction in waiving off interest on interest during the moratorium period, due to COVID-19. The RBI had in March granted a three-month loan moratorium due to the COVID pandemic-induced situation, which was then extended till August 31.