New Delhi: The Supreme Court postponed loan moratorium till October 5. On behalf of the central government, solicitor general Tushar Mehta has sought time from the court citing the complications of the issue. However, the bench consisting Justice Ashok Bhushan has asked Center to file affidavit by October 1.
The central government requested that we are talking to the RBI in this matter and soon will come up with solution. Therefore, some time should be given to reach a conclusion. Thereafter, the next hearing in the loan moratorium case will be held on October 5 as SC implicated.
Solicitor General Tushar Mehta urged for more time from the court, saying, “This is a slightly complicated issue and consecutively more economic matters are following it. We are in talks with the RBI on this matter”.
Earlier on September 10, the Supreme Court said that the case is being deferred again and again. The Supreme Court gave an opportunity for another two weeks and said that everyone should file their affidavit and come to court with a concrete plan in the case. The SC had implied this since the first hearing in the case. The people who cannot give their EMI, will have the option to postpone their EMI for further. While the petitioners say that people are not getting any benefit of this because those who are postponing their EMI, then they have to pay full interest for the period of this adjournment.
The government says that postponement of interest (which is in the form of compounding) for the period of moratorium will cause huge losses to the banks and many banks will sit down and also, those who have given Compound Interest will be at a disadvantage. The government has also been seen to flush its foot in this whole matter by putting forward the RBI.
On September 10, while pleading on behalf of the government and the RBI, Tushar Mehta said in the court that the banks cannot discount the interest, but will reduce the pressure of payment. Mehta had said that the banking sector is the backbone of the economy and no decision can be taken to weaken the economy.
He further added, “I believe that all the people who have kept their sides are absolutely right. Meanwhile, it is important to consider the situation of every sector and the banking sector will also have to be taken care of. The motive of the moratorium was not to cancel the Installment payments for the given period.
The banks have started reminding their customers about the loan repayment as soon as the loan moratorium was over. The customers are receiving messages, phone calls and e-mail to pay EMI from banks. Due to this, people are afraid of declaring their bank loan account as Non Performing Asset (NPA). The Supreme Court has said that until the government does not give concrete plans, till then the interim order will not continue to declare loan defaulters as NPAs.