SC On Interest Waiver On Loan In Moratorium: Limit Scope To Interest Charged On Deferred Interest

On June 12, in an important case hearing for bank, the Supreme Court on the interest waiver on loan moratorium said the apex court may limit scope of interest waiver to interest that shall be charged on delayed interest payment post the moratorium period ends.

SC On Interest Waiver On Loan In Moratorium: Limit Scope To Interest Charged On Deferred Interest

And this means the full waiver on interest for borrowers is not being considered by the apex bank.

It is to be noted that in the wake of nationwide which disrupted business the RBI in an off-cycle meet allowed 3-month moratorium on all term loans which became due between March 1 and May 31. And this on account of protracted lockdown has been further allowed for another 3 months until August 31, 2020.

On June the RBI made a call that bankers will incur a loss of Rs. 2 lakh crore if interest is waived in entirety for themoratorium period.

"Our query was limited to whether there will be a levy of interest on deferred interest.If RBI travels beyond the query posed there will be many opinions," the SC said on June 12.

The next hearing is scheduled for June 17. Meanwhile, the country's largest PSB SBI has also intervened and suggested that waiver on interest is not a feasible measure.

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