Borrowers’ Diwali in govt hands: Supreme Court

Moratorium Modalities being worked out to waive interest on interest, SG tells court

Borrowers’ Diwali in govt hands: Supreme Court

SC insists on knowing when decision on waiving ‘interest on interest’ will be implemented.

Tribune News Service

New Delhi, October 14

The Supreme Court on Wednesday asked the Centre to implement its decision to waive compound interest on loans up to Rs 2 crore at the earliest even as Solicitor General Tushar Mehta said the modalities were being worked out to ensure borrowers got the intended benefit.

RBI on loan recast

The RBI has clarified that standard loans without any defaults as of March 1, 2020, would be eligible for restructuring under the pandemic-related resolution framework issued in August. PTI

“We are only asking if the benefit of compound interest waiver is percolating down to borrowers,” a Bench headed by Justice Ashok Bhushan asked the Solicitor General.

“Their (borrowers’) Diwali is in your hands,” the Bench said while posting the matter for further hearing on November 2.

As Mehta said discussions were already on, senior counsel Harish Salve, representing Banks’ Association, interjected to say that the RBI needed to issue a circular for it because banks can’t do it on their own. “We are saying it will be done. The Centre has also assured it will be done,” Salve submitted.

As the Bench insisted on knowing as to when the decision on waiving “interest on interest” would be implemented, Mehta said: “The government has given the assurance on affidavit and we have already said that a decision has been taken… now only the modalities have to be worked out.”

Mehta sought time till November 15 to work out the modalities for implementation of its decision not to charge “interest on interest” from most vulnerable borrowers belonging to seven categories on loans up to Rs 2 crore.

Next hearing Nov 2

  • SC insists on knowing when decision on waiving ‘interest on interest’ will be implemented
  • Solicitor Gen seeks more time to waive compound interest on loans up to Rs 2 cr.

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