Interest waiver will impact financial viability of banks: RBI to SC

The Reserve Bank of India, on Wednesday, told the Supreme Court that a waiver of interest on loans will impact the financial viability of the country’s banks and will be harmful for the interests of depositors and the financial sector.

In an affidavit to the apex court, the RBI also said that the moratorium on loans, which was recently extended to August 31, is in the nature of a deferment and cannot be construed to be a waiver. 

Giving an illustrative example RBI also said that banks could forego about Rs 2 trillion in interest income if interests are waived off for