New Delhi: The loan moratorium ended on August 31 leaving many MSMEs in distress. The petition is also filed in Supreme court on the issue of interest on interest. During the hearing, Solicitor General Tushar Mehta on Tuesday informed the Supreme Court that the moratorium on repayment of loans is extendable to 2 years. “We are in the process of identifying the distressed sectors to vary benefits as per the impact of the hit they have taken,” Mehta said.
The SC said, ‘it will hear tomorrow and decide on the bunch of petitions demanding waiver of interest, or waiver of interest on interest on the suspended EMIs during the moratorium period.
The moratorium scheme, which was introduced by the government to provide relief to borrowers from coronavirus pandemic, ended on August 31.
As a relief during the lockdown government provided a loan moratorium upto 31st August. On August 26, the apex court had observed that the Centre was “hiding behind the RBI” and had asked it to reply within a week on the issue of interest being charged on instalments which have been deferred under the central bank’s scheme during the moratorium period amid COVID-19 lockdown.
The top court had said there was “no merit in charging interest on interest” for deferred loan payment installments during the moratorium period announced in wake of the COVID-19 pandemic.
Agra resident Gajendra Sharma, in his plea before the SC, had sought a direction to declare the portion of the RBI’s March 27 notification “as ultra vires to the extent it charges interest on the loan amount during the moratorium period and said that it created hardship to the petitioner being borrower and creates hindrance and obstruction in ”right to life” guaranteed by Article 21 of the Constitution of India”.