Supreme Court to resume hearing on loan moratorium, interest on interest waiver case today

The RBI had given a loan moratorium owing to Covid-19 and its fallout on businesses and consumers' income. The period of moratorium had ended on August 31.

The apex court will resume hearing a batch of petitions urging an extension of the loan moratorium period and waiver of interest on interest on term loans today.

The RBI had given a loan moratorium owing to Covid-19 and its fallout on businesses and consumers' income. The period of moratorium had ended on August 31.

Subsequently, borrowers had sought relief from the top court asking for waiver of interest on interest and a further extension of the moratorium period.


The finance ministry in its affidavit filed before the top court on October 25 had stated that the government has decided to provide a waiver on compounding of interest for the the moratorium period for loans to MSMEs and personal loans up to Rs 2 crore.

The RBI had directed banks to credit the requisite amount to borrowers' accounts.

The RBI had filed the affidavit saying that it has asked all banks, financial and non-banking financial institutions to take "necessary actions" to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme.
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The government had said that the ministry has issued a scheme as per which lending institutions would credit this amount in the accounts of borrowers for the six-month loan moratorium period which was announced following the COVID-19 pandemic situation.

The RBI has also urged the Supreme Court to life its interim order that held that accounts which were not declared NPAs until August 31 will not be declared NPAs till further orders.
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