The loan moratorium period for loan and EMI payments ended in August but the case related to charging of additional interest rates by banks during the grace period seems to be dragging on in Supreme Court.
On Thursday, Solicitor General Tushar Mehra, appearing for the RBI and the Centre, said two or three rounds of stakeholder meetings have taken place. Mehta said, “On concerns expressed on the last date, two or three rounds of meeting have taken place and it has been examined.”
“Considered decisions have to be taken. In consultation with banks as banks will play a vital role. Kindly defer matter for two weeks.”
While Mehta has sought yet another deferment in the case, reports suggest that individuals who opted for the moratorium are facing severe issues in repaying due to the current economic distress.
Appearing on behalf of the Indian Banking Association (IBA), senior advocate Harish Salve said government has not taken any firm position on the matter yet.
“A new resolution has come and which is to be registered and norms will be effectuated. For individual borrower, the common man, state bank had effectuated guidelines,” said Salve.
To Salve’s statement, Justice Ashok Bhushan asked, “Who will put this forth?”
Salve told Justice Bhushan that the Ministry of Finance will take the decision and that it has been “done at the level of the RBI”.
SG Mehta added that it is “being done at a level higher than the RBI. We need time to finalise”.
However, senior advocate Kapil Sibal, appearing on behalf of CREDAI, said the loan restructuring may not provide any relief to 95 per cent of the borrowers.
Citing reports, Sibal said that borrowers are being downgraded and that they must be protected in view of the current economic situation.
Senior advocate Rajeev Dutta said that borrowers are still being charged compound interest and added that the process of loan restructuring should have been carried out earlier.
He then recounted the plight faced by the common man during the economic crisis and said the government needs to give a clear stand on the matter soon.
Meanwhile, the Supreme Court bench said it has not yet taken a decision on interest issue, but said that it is “inclined” to pass against charging of additional interest during the moratorium period.
SC finally decided to give time to SG Tushar Mehta and asked him to file a “concrete reply” on behalf of Centre and RBI so the matter is not adjourned again. The Supreme Court will now hear the matter on September 28.