The government decision's to waive off compound interest payment for small borrowers during the six-month moratorium period should be implemented by November 2, said the Supreme Court on Wednesday, according to multiple media reports.
The government's decision is decision is welcome, but we need to see concrete results on the ground, said the court as it set November 2 as the next date of hearing in the matter, according to CNBC-TV18.
The Centre’s decision to fund the compound interest payment will come at a cost of Rs 6,500 crore, a senior government official told Business Standard earlier this week.
The Supreme Court is hearing a demanding waiver of interest charged by banks on instalments that have been deferred for repayment by the Reserve Bank of India through a six-month moratorium imposed in March.
The government has told the apex court it is ready to bear the burden of waiving compound interest for any individual or entity whose loan amount is less than Rs 2 crore, irrespective of whether they have availed of loan repayment moratorium or not. However, it had not stated the cost implications which will involve sponsoring compound interest of borrowers belonging to private lenders, too.
Besides, the finance ministry is going to take proposals related to setting up a development finance institution and a new policy on public sector enterprises to the Union Cabinet shortly, the government official cited above said, without delving much into the details.