Asking banks to waive interest will adversely impact financial system: Govt

The finance ministry and the Reserve Bank of India (RBI) told the Supreme Court on Wednesday that banks are playing a crucial role in reviving the economy. Hence, asking them to take a hit on interest rates will adversely affect the financial system as well as economic growth, the apex court was told.

Arguing on behalf of the Centre and the RBI, Solicitor General Tushar Mehta told the three-judge Bench that waiving interest or granting a blanket moratorium on repayment of loans will be a “knee jerk reaction” and not in the best interest of the economy. 

The apex court said it