New Delhi: The Centre on Monday (September) told the Supreme Court that it will likely come with a decision by 1 October over charging of interest by banks on instalments which were deferred during the moratorium period in view of the COVID-19 pandemic.
The top court asked the Centre to bring the decision on record and circulate the affidavit to the parties in a batch of pleas challenging interest on deferred instalments.
Here are the ten things about impending deadline
– The Centre informed the top court that the matter has received very serious consideration and the decision making process is at advanced stage.
– A bench headed by Justice Ashok Bhushan said that it would hear the batch of pleas filed by various industries, trade associations and individuals on October 5.
– Tushar Mehta, appearing for the Centre has said that the affidavit will be sent by October 1.
– On September 10, the top court had extended its interim order that no account is to be declared a non performing asset (NPA) or bad loan till further orders after the Centre said an expert panel has been set up to look into the issue of interest being charged by banks on instalments deferred during the moratorium period due to COVID-19 pandemic.
– On September 3, in a relief to stressed borrowers who are facing hardship due to the impact of pandemic, the top court had said that accounts which were not declared as non-performing assets till August 31 this year, shall not be declared NPA till further orders.
– The pleas in the apex court have raised issues pertaining to validity of RBI’s March 27 circular which allowed lending institutions to grant moratorium on payment of instalments of term loans falling due between March 1, 2020 and May 31 this year due to the pandemic. Later, the period of moratorium was extended till August 31.
– The Centre had recently told the court that waiver of interest on deferred EMIs during moratorium period would be against the basic canons of finance and unfair to those who repaid loans as per schedule.
– RBI has however come out with a scheme which provides for extension of moratorium for two years to certain stressed borrowers, the Centre had informed the top court.
– On March 27 the had RBI permitted all commercial banks, co-operative banks, all-India Financial Institutions, and NBFCs to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020.
– In May, the RBI announced extension of loan moratorium by 3 more months to August 31.