Loan Moratorium

In a verdict that balances business and consumer interests, the Court ruled that there would be a waiver of compound interest on loans from March 1 to August 31, 2020 due to Covid-19.

The Supreme Court said, the loan moratorium period will not extend beyond August 31, recovery of compound interest from borrowers… court refuses to interfere in loan moratorium policy.

The bench had reserved the verdict on December 17 last year after hearing the petitioners, the Centre, RBI and intervenors.

The advocate of the petitioner, Vishal Tiwari had sought the modification of original prayers in the petition which associated with the extension of the moratorium period up to December 31.

The main issues that came up were that the limited relief in waiving compound interest till Rs 2 crore was not enough in addressing the pain of the small time entrepreneurs who have lost all in the pandemic.

New Delhi (ILNS): Solicitor General Tushar Mehta today told the Supreme Court that the government will ensure that those who paid up during the moratorium period are not short-changed. Will ensure those who paid during moratorium aren't short-changed.

The loan moratorium case will now be heard by the Supreme Court on Thursday. This was decided after the Central government informed the court that their lawyer, the Solicitor General, was busy with some other matter.

New Delhi (ILNS): The Supreme Court today gave the RBI, the Centre and the banks a week’s time to file their replies and observations on the issue of loan moratorium and interest payment for sectors that have claimed they deserve repayment consideration because of the Covid-19 pandemic.

New Delhi (ILNS): The Central government, in its affidavit before the Supreme Court has agreed to waive off compounded interest for loans up to Rs 2 crore during the six months loan moratorium period in the wake of Covid-19 pandemic.

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