Supreme Court refuses to extend loan moratorium period
The Supreme Court on Tuesday refused to extend the six-month loan moratorium period as announced by the Reserve Bank of India (RBI) last year.
The top court said that it was a 'policy decision' on part of the Centre and RBI. While delivering its verdict on several petitions seeking an extension of the loan moratorium period, the Supreme Court-bench led by Justice Ashok Bhushan said it cannot do a judicial review of the financial policy decisions by the central government unless they are malafide.
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The Reserve Bank of India, on March 27 last year, had announced a moratorium on loan installments that were due between March 1 and May 31. However, it was extended by three months till August 31, 2020.
The relief was meant for personal loans, housing loans, education loans, auto, and consumer durables loans, besides loans to micro, small and medium enterprises (MSME) and credit card dues, subject to applicable conditions.
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The apex court stated that a complete waiver of interest for the moratorium period could not be granted. It said that banks have to pay interest to account holders and pensioners.
Meanwhile, the government was opposed to the waiver of interest during a moratorium period.
The top court further stated that no compound or penal interest should be charged from borrowers for the period of six-month loan moratorium. The amount already charged should be refunded, credited, or adjusted, it directed.
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