Govt sets up panel to study calls for giving interest relief on bank loans

Three-member committee led by Rajiv Mehrishi to measure impact on economy on the 'waiving of interest and waiving of interest'

The government on Thursday set up a three-member committee to examine calls for relief on interest banks are charging on loan instalments deferred during the moratorium period due to the coronavirus pandemic.

Rajiv Mehrishi, a former Comptroller and Auditor General, will be the chairperson of the committee. Ravindra H Dholakia, a former professor at IIM Ahmedabad, and B Sriram, a former managing director at State Bank of India and IDBI Bank, will be the other members.

The committee will measure the impact on economy and financial stability on the "waiving of interest and waiving of interest on interest on the Covid-19 related moratorium", said a government statement, referring to the disease caused by the virus.

The Supreme Court earlier Thursday extended its interim order that no account is to be declared as "non-performing" till further orders after the government said an expert panel has been set up to look into the issue of interest being charged by banks.

The court gave two weeks to the government and Reserve Bank of India (RBI) to file an affidavit and place before it the decisions taken in this regard.

The committee will give "suggestions to mitigate financial constraints of various sections of society in this respect and measures to be adopted in this regard," said the government.