SC order a big relief, removes uncertainties: Bankers

In a relief to banks the Supreme Court has rejected the petition for extension of loan moratorium due to the Covid-19 pandemic.

A three judge bench of justice Ashok Bhushan, R Subhash Reddy and MR Shah while rejecting a further extension beyond August 31 said there cannot be a complete waiver of interest during the period.

However, it has forbidden banks to charge compounded or penal interest to borrowers during the moratoium period.

The judgement is a big relief for banks as it clears a big uncertain on moratorium loans.

"This is welcome because no more waivers have been given. Though details of the judgement are yet to come out it looks as if banks' interest have been protected. It is positive," said a banker.

The apex court has said that it will not interfere in policy matters of the government and RBI, likely shutting the door on any review. It has also refused to direct the government or RBI to extend reliefs beyond the sectors mentioned.