Implement interest waiver at the earliest; SC instructs Centre

New Delhi: The Supreme Court on Wednesday instructed the Centre to implement waiver of compound interest accumulated during the moratorium on loans of up to 2 crores. Though the Centre requested a month to fulfil formalities, the court refused and listed the case for 2nd of November. A three-judge bench including Justices Ashok Bhushan, R Subhash Reddy & MR Shah heard the petitions for interest waiver.

"Our view is one month is not required to implement the decision… The delay is not in the interest of common man… It is a welcome decision to give relief to small people. But some concrete results are needed," said the bench. The waiver has been proposed for eight categories including MSME, education, housing, consumer durables, credit card, auto, personal and consumer loans.

The Solicitor General Tushar Mehta, appearing for the Centre and the RBI, informed the court of the Centre's decision that the compound interest would be waived, though it was a 'huge burden' in an affidavit filed two weeks ago. He also informed the court that it would not be possible to extend the moratorium or supplement existent relief packages.

The Reserve Bank of India had granted a moratorium on loans in March due to the Covid pandemic. This was done to provide borrowers with time to repay their debts and prevent the downgrade of accounts to non-performing assets (NPA). The moratorium was then extended to August 31st. In September, the Supreme Court first heard the bunch of petitions requesting for the waiver of interests for the 6 month moratorium period.

Though the advocates appearing for the petitioners requested for a statement from the court, it was refused and instead the matter was adjourned for the 2nd of November. "We will expect the implementation of the government's decision on interest waiver by then. We will review the implementation of the waiver," said the court.

(The story is translated by Anan Ashraf)