SC defers loan moratorium to Oct 5; Interim order to continue

The Supreme Court today adjourned the hearing on the two petitions that sought an extension of the moratorium period on repayment of loans and to waive off the interest on the interest on loan amount in view of the Covid-19 pandemic to October 5.

Solicitor General Tushar Mehta representing the Centre informed the Supreme Court bench headed by Justice Ashok Bhushan that the issues are under active consideration of the Government and a decision is likely to be taken within 2-3 days. The Court has given the Centre time till October 1 to file an affidavit after consultation with the Reserve Bank of India (RBI) and the Finance Ministry.

The Apex Court had earlier adjourned the hearing on September 10 directing that all decisions taken by the RBI, the Government of India, or the banks be placed before it for consideration. The Centre had informed that the Supreme Court that an Expert Committee at the highest level has been constituted in order to take a decision on the issue of loan moratorium extension, interest during moratorium and interest on interest following which the Supreme Court on 10 September ordered interim extension of loan moratorium till 28 September.

The Supreme Court in the previous hearings said that those accounts that had not been declared Non-Performing Assets (NPAs) as on August 31 should not be declared bad loans until the case was disposed of.

Earlier, the Centre and the RBI had informed the Supreme Court that the moratorium on repayment of loans could be extendable to up to two years under certain conditions and that sectors most distressed by the economic slowdown were being identified. The Solicitor General had then said, "We are in the process of identifying the distressed sectors to vary benefits as per the Covid-19 impact of hit they have taken".