Credit moratorium: Supreme Court adjourns hearing to November 5

The Supreme Court on Tuesday postponed hearings until Nov. 5 on a series of petitions calling for an extension of the lending moratorium as well as an interest waiver on term lending EMIs during the six-month moratorium.

The lawsuits relate to banks charging interest on interest on loan EMIs not paid by borrowers made March 1 through March 31.

A three-judge chamber headed by Justice Ashok Bhushan adjourned the matter after Attorney General Tushar Mehta requested that the hearing in the case be adjourned because he was before another chamber on another matter related to the Central Vista project had to appear.

Also read: Credit moratorium “renewable” up to 2 years: Government to SC

“These moratorium issues were listed yesterday but they surfaced today. I am asking for an adjournment because I have a case (Central Vista) that I will be arguing on,” the attorney general said.

The RBI and the Treasury have already filed separate additional affidavits with the Apex Court requiring the banks, financial and non-bank financial institutions to pay up to Rs 5 crore to as much as Rs 2 crore during the moratorium period.

A letter calling for the hearing in the case to be postponed was also distributed to the parties and the court by Anil Katiyar, the center’s attorney on record.

The Supreme Court granted the request and adjourned the November 5 hearing on the pleas, including Gajendra Sharma’s.

Earlier, the RBI had filed an affidavit saying it had asked all banks, financial and non-bank financial institutions to take “necessary action” to credit eligible borrowers’ accounts with the difference between compound interest and simple interest that Loans of up to Rs 2 crore will be levied during the moratorium.

Also read: “Further relief is not possible, no extension of the credit moratorium”: The center tells the Supreme Court

Earlier, the central government told the Supreme Court that lenders had been ordered to credit the difference between compound interest and simple interest charged on loans of up to Rs 2 crore during the RBI’s lending moratorium scheme to eligible borrowers’ accounts by May 5 November .

The government had said the ministry had issued a plan under which lending institutions would credit that amount to borrowers’ accounts for the 6-month lending moratorium period announced in the wake of the COVID-19 pandemic.

On October 14, the Supreme Court ruled that the center should implement the interest waiver on loans of up to Rs 2 crore under the RBI’s moratorium “as soon as possible”, and had declared that Diwali was in the hands of the common man lies with the government.

RBI had issued the circular on March 27, allowing credit institutions to grant a moratorium on payment of installments on term loans maturing between March 1, 2020 and May 31, 2020 due to the pandemic. The moratorium was later extended to August 31 of that year.

Also read: Banks have been ordered to credit borrowers “interest on interest,” RBI SC said

(With inputs from PTI.)

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