{"id":19461,"date":"2020-09-03T18:18:32","date_gmt":"2020-09-03T18:18:32","guid":{"rendered":"https:\/\/bengalnewstimes.com\/?p=19461"},"modified":"2020-09-03T18:18:32","modified_gmt":"2020-09-03T18:18:32","slug":"waiving-of-interest-will-weaken-banking-sector-govt-tells-sc","status":"publish","type":"post","link":"https:\/\/bengalnewstimes.com\/?p=19461","title":{"rendered":"Waiving of interest will weaken banking sector: Govt tells SC"},"content":{"rendered":"<p><\/p>\n<div>\n<div class=\"article-image\">\n<figure><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2072995\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-80.jpg\" alt=\"The Association of Power Producers asked banks to forego profit for this year as it was among the most stressed sectors.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2072995\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-80.jpg\" alt=\"The Association of Power Producers asked banks to forego profit for this year as it was among the most stressed sectors.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-2072995\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-80.jpg\" alt=\"The Association of Power Producers asked banks to forego profit for this year as it was among the most stressed sectors.\" width=\"660\" height=\"440\" srcset=\"https:\/\/images.financialexpress.com\/2020\/09\/1-80.jpg 660w, https:\/\/images.financialexpress.com\/2020\/09\/1-80-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/09\/1-80-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/09\/1-80-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/09\/1-80-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/09\/1-80-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/09\/1-80-313x209.jpg 313w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/noscript><\/noscript><span class=\"article-caption\">The Association of Power Producers asked banks to forego profit for this year as it was among the most stressed sectors.<\/span><\/figure>\n<\/div>\n<p>Solicitor General Tushar Mehta on Wednesday told the Supreme Court (SC) that the banking sector plays a vital role in the revival of the economy and a \u201cknee jerk reaction\u201d to simply waive off interests on loans will weaken the sector.<\/p>\n<p>Mehta told a bench led by Justice Ashok Bhushan: \u201cWe are not in adversarial litigation here. We are all here to find a solution to the crisis. There were some options available for reviving the economy. One was to write off the interest. The second was a more holistic option in which the first step would be to ease the burden of repayment of loans. Next priority was the revival of sectors so that economy gets moving, restructuring of stressed assets and then the operations of banking sectors,\u201d he said, adding that different sectors of the economy have been affected differently due the Covid-19 lockdown.<\/p>\n<p>Opposing allegations that the Reserve Bank of India (<a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/tag\/rbi\/\" rel=\"noopener noreferrer\">RBI<\/a>) is acting as the agent of the banks, Mehta said that one has to take into account that banking sector is a multi-layered structure with different types of banks, non-banking financial corporations (NBFC), and passing a blanket order to all will not produce desired results. \u201cBesides, economy mostly runs on not large corporates but on smaller businesses,\u201d he added<\/p>\n<p>On Tuesday, the government had told the SC that another two years of the moratorium could be availed by borrowers under debt resolution (recast) window notified by RBI in early August. This will allow interest rate changes, but a waiver of interest on deferred instalments would be against \u2018the basic canons of finance\u2019 and unfair to those who repaid loans as per schedule. A six-month moratorium on term loans announced earlier expired on August 31.<\/p>\n<p>Earlier during the day, borrowers and other petitioner told the apex court that banks were free to restructure loans, but they cannot penalise honest borrowers by charging interest on deferred EMIs under the moratorium scheme. \u201cPublic at large is going through a tough time. If the Insolvency and Bankruptcy Code (IBC) could be suspended to give relief to the industry, then why can\u2019t borrowers. Instead of giving respite, the banks are encashing on this mitigating situation,\u201d senior counsel Rajiv Datta argued.<\/p>\n<p>Senior advocate CA Sundaram, representing real estate industry body the Confederation of Real Estate Developers Association of India (CREDAI), argued that suggested that the moratorium should be extended for at least six months and even if the interest cannot be waived off, it should be reduced to a level at which banks pay depositors. The Association of Power Producers asked banks to forego profit for this year as it was among the most stressed sectors.<\/p>\n<p>The Supreme Court is hearing a batch of petitions seeking a moratorium on all loan instalments for the period between March 1 and August 31 as well as a waiver of interest on the unpaid instalments. The SC will continue hearing the case on Thursday.<\/p>\n<div class=\"common-bottom-text\">\n<p>Get live <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/\" target=\"_blank\" rel=\"noopener noreferrer\">Stock Prices<\/a> from <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/s-p-bse-sensex-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">BSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nifty-50-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">NSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/investing-abroad\/\" target=\"_blank\" rel=\"noopener noreferrer\">US Market<\/a> and latest NAV, portfolio of <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mutual Funds<\/a>, calculate your tax by <a href=\"https:\/\/www.financialexpress.com\/income-tax-calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">Income Tax Calculator<\/a>, know market\u2019s <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-gainers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Gainers<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-losers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Losers<\/a> &amp; <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/equity-funds\/\" target=\"_blank\" rel=\"noopener noreferrer\">Best Equity Funds<\/a>. Like us on <a href=\"https:\/\/www.facebook.com\/thefinancialexpress\" target=\"_blank\" rel=\"noopener noreferrer\">Facebook<\/a> and follow us on <a href=\"https:\/\/twitter.com\/FinancialXpress\" target=\"_blank\" rel=\"noopener noreferrer\">Twitter<\/a>.<\/p>\n<p class=\"telegram-text\"><img loading=\"lazy\" decoding=\"async\" class=\"telegrma_img\" src=\"https:\/\/images.financialexpress.com\/2020\/04\/telegram.png\" alt=\"\" width=\"24\" height=\"24\" style=\"margin: 0px 5px 4px 0px; float: left;\"\/>Financial Express is now on Telegram. <a href=\"https:\/\/t.me\/TheFinancialExpressOnline\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to join our channel<\/a> and stay updated with the latest Biz news and updates.<\/p>\n<\/div>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><a href=\\\"https:\/\/www.financialexpress.com\/industry\/banking-finance\/waiving-of-interest-will-weaken-banking-sector-govt-tells-sc\/2072991\/\\\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Association of Power Producers asked banks to forego profit for this year as it was among the most stressed sectors. Solicitor General Tushar Mehta on Wednesday told the Supreme Court (SC) that the banking sector plays a vital role in the revival of the economy and a \u201cknee jerk [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":19462,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-19461","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-business"],"jetpack_featured_media_url":"https:\/\/bengalnewstimes.com\/wp-content\/uploads\/2020\/09\/1-80.jpg","_links":{"self":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/19461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19461"}],"version-history":[{"count":0,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/19461\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/media\/19462"}],"wp:attachment":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}