SC asks Centre to file detailed affidavit on pleas seeking moratorium extension

In wake of the COVID-19 pandemic, the Supreme Court on Thursday asked the Central government to file a detailed affidavit on a batch of petitions seeking an extension of the moratorium period on repayment of loans and to waive off the interest on the repayment of the loan amount. The RBI, however, had earlier informed SC that repayment of loans allowed during the coronavirus crisis can be extended by two years.

Justice Ashok Bhushan headed the bench and asked the Centre to file a detailed affidavit and posted the matter for further hearing after two weeks. A Public Interest Litigation (PIL) was submitted by one of the petitioners, Advocate Vishal Tiwari. The PIL was regarding the extension of the moratorium, which stated that there should be a relief to the individual borrowers and service sectors, besides big manufacturing sectors and till further orders, borrowers CIBIL score shall not be affected and no coercive action shall be taken against borrowers till further orders.

Representing the Centre, Solicitor General Tushar Mehta said that they are having a lot of consultation with banks and other stakeholders for relief. Stating that the consideration is taking place at the highest level, Tushar Mehta added that this is a subject matter of holistic consideration and that authorities are concerned about the borrowers. However,  Senior advocate Rajeev Dutta, who was representing a set of borrowers, told the apex court that the compound interest is still being charged in loan cases.

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RBI on COVID moratorium

The RBI has already informed SC that repayment of loans allowed during the coronavirus crisis can be extended by two years. Amid the COVID-19 pandemic, the RBI had allowed banks and other financial institutions to offer a six-month moratorium to all existing individual and corporate term loan borrowers until August 31. Finance Minister Nirmala Sitharaman too has asked bankers to roll out loan resolution schemes by September 15 adding that COVID-19 related distress must not impact their assessment of borrowers' creditworthiness.

(With inputs from ANI)

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