SC reserves verdict on pleas to extend loan moratorium period

New Delhi, December 17: The Supreme Court has reserved its verdict on pleas requesting an extension of the loan moratorium period. The loan moratorium period lasted for six months and had ended on August 31, 2020.

Senior lawyer Ravindra Srivastava, on behalf of the Chhattisgarh industry bodies, said the impact of Covid-19 in continuous and many people are still suffering financially, India Today reported.

He said this is a case where the NDMA should have come out instead of handing over the burden to the banks. He went on to say that there has to be a solution regarding the moratorium and that the power cannot be left to the banks.

“Instead RBI should be making provisions for resolution of processes,” he said.

“NDMA has to collect empirical data and make a comprehensive policy, not arguing that there needs to be a complete waiver. There can be a partial waiver also but for this, there is a need for a calibrated policy under the Disaster Management Act (DMA),” Srivastava said.

It may be noted that the Reserve Bank of India (RBI) had in March announced a moratorium on repayment of term deposits for three months, later extended till August 31. The move was intended to provide relief to borrowers during the Covid-19 pandemic.

The Supreme Court had also instructed banks to not declare accounts as NPAs until further orders.

Finally, the Centre in October decided that it would waive compound interest on repayment of loans up to Rs 2 crore in some categories. The move provided marginal relief to individual and MSME borrowers.

Petitions with respect to the interest on interest charges were disposed off on November 19 as petitioners were satisfied with the waiver announced by the government.

https://www.indiatoday.in/india/story/sc-reserves-verdict-on-pleas-to-extend-loan-moratorium-period-1750462-2020-12-17