Loan moratorium: SC adjourns hearing to Oct 5 as govt seeks more time

The Supreme Court on Monday adjourned for October 5 the hearing on the two petitions seeking an extension of the moratorium period on repayment of loans and to waive off the interest on the interest on loan amount in view of the Covid-19 pandemic. Solicitor General representing the government told the court that the issues are under active consideration of the Government and a decision is likely to be taken within 2-3 days.

The apex court had earlier adjourned the hearing on September 10 directing that all decisions taken by the RBI, the Government of India, or the banks be placed before it for consideration. The court had given time to RBI to file the affidavit.

The SC in the previous hearings said that those accounts that had not been declared non-performing assets (NPAs) as on August 31 should not be declared bad loans until the case was disposed of.

The court, hearing a petition filed by lawyer Vishal Tiwari, sought directions, till the court reopens, to all the banks to adhere to extend the moratorium period for lawyers/ service sector, transport and tourist industry, including drivers and other covered under these sectors and defer their EMI payment on term loans. It also sought that in case, such acts are committed by the lending 

Institutions then, strict action shall be taken against them in accordance with the law.

"The emergence of the Covid-19 pandemic in India has brought a drastic financial difficulty along with the health disaster that is going on in this country. Various people have lost jobs during this situation of biological emergency and various professionals and others have gone through real financial hardship," the plea said.

The Centre and the Reserve Bank of India (RBI) informed the Court that the moratorium on repayment of loans could be extendable to up to two years under certain conditions and that sectors most distressed by the economic slowdown were being identified. It argued that the waiver of interest on deferred EMIs during the moratorium period would be against the basic canons of finance and unfair to those who repaid loans on schedule.