Supreme Court<\/a> (SC) on Wednesday took exception to the Central government\u2019s refusal to take an independent stance regarding levy of interest by banks on loans in moratorium even after Reserve Bank of India (RBI) had announced the relief on borrowings between March and August owing to the coronavirus disease (Covid-19) outbreak.<\/p>\nAn apex court bench, headed by Justice Ashok Bhushan, said that plight of people due to Covid-19 and the resultant nationwide lockdown restrictions should be considered by the Central government while taking a call on the issue and ordered the government to file a separate affidavit.<\/p>\n
The SC gave its order after solicitor-general (S-G) Tushar Mehta told the apex court that its stance on the matter is the same as that of RBI. <\/p>\n
Earlier in June, RBI had filed an affidavit before the SC stating that it would not support the move to waive off interest, as it could affect the financial viability of banks. <\/p>\n
\u201cYou should make your stand clear instead of relying on RBI,\u201d Justice MR Shah, who was part of the bench, told Mehta.<\/p>\n
\u201cGovernment of India has ample powers under the Disaster Management Act, 2005, to take a decision. You should clarify two issues: whether interest can be charged and whether interest on interest can be levied,\u201d Justice Bhushan said.<\/p>\n
The court adjourned the matter for further hearing on September 1 prior to which the Centre has to file its response. The moratorium announced by RBI expires on August 31. <\/p>\n
\u201cThe issue was created by your lockdown. Now, you cannot look into business (of banks) alone, but the plight of people should also be looked into,\u201d the bench remarked.<\/p>\n
The petition, which was filed by Gajendra Sharma, an Agra resident, had demanded a waiver on interest charged by banks citing the relief announced by RBI on the payment of equated monthly instalments (EMIs) between March and August 31 due to the pandemic.<\/p>\n
Petitioner Sharma specifically cited RBI\u2019s March 27 and May 22 notifications announcing a moratorium on loan repayments while permitting banks to levy interest.<\/p>\n
\u201cThe imposition of interest (by banks) during the moratorium period is devastating and wrong,\u201d he had submitted before the apex court. <\/p>\n
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