Loan moratorium – Supreme Court gives government until Thursday to file affidavit, next hearing scheduled for October 5

  • The Supreme Court gave the Indian government until Thursday, October 1 to file an affidavit indicating whether the interest and accrued interest on moratorium loans must be billed.
  • At the last hearing at the beginning of the month, Judge Ashok Bhushan said the bench is inclined to pass an order that interest on interest should not be charged on default loans.
  • The case will be heard again on October 5. During this time, banks cannot designate accounts as non-performing until the matter is fully resolved.

The question of the accumulation of interest on loans that have opted for the Reserve Bank of India (RBI) moratorium is still open. The Supreme Court gave the government three more days, until Thursday, October 1, to file its affidavit in consultation with the RBI and the Department of Finance.

“Little complex question. Several economic questions arise,” Solicitor General Tushar Mehta told the bench headed by Judge Ashok Bhushan. For now, the case has been adjourned and will resume from Monday, October 5. Meanwhile, interim orders issued by the Supreme Court stand – banks cannot report the accounts as non-performing assets (NPAs) until the case is resolved.

“Regarding interest, we have not yet made a decision, but on the aspect of debiting interest on interest, we are inclined to issue an order prohibiting its debit,” Judge Ashok Bhushan said at the time. from the previous hearing.

“Everything you come up with should be very clear,” Judge Shah told SG Mehta. According to Mehta, a committee has been formed at “the highest levels” to decide the issue of the extension of the moratorium, interest during the moratorium, interest on interest and other matters related to the period of the moratorium.

The bench informed Mehta that all decisions made by the RBI, the Indian government and state banks should be submitted to the courts for review at the next hearing.

SEE ALSO:
Kamath committee sets parameters for loan restructuring for 26 sectors

Supreme Court interim relief on loan moratorium – banks must not report accounts as NPA for two months

Supreme Court says banks are free to restructure loans, but cannot penalize borrowers who take advantage of a moratorium

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