Decision on interest waiver soon

 Supreme Court tells Centre it will not admit of any adjournment on deciding on interest on

interest waivers

TT   |   New Delhi   |  29.09.20  :  The Centre informed the Supreme Court on Monday that a decision is likely in 2-3 days over the charging of interest on interest waivers by banks on instalments which were deferred during the moratorium period in view of the Covid-19 pandemic.

The top court asked the Centre to bring the decision on record and circulate the affidavit to the parties in a batch of pleas challenging the interest on deferred instalments. The Centre informed the top court that the matter has received very serious consideration and the decision making process is at an advanced stage.

A bench headed by Justice Ashok Bhushan said that it would hear the batch of pleas filed by various industries, trade associations and individuals on October 5. The apex court, while conceding the Centre’s request, told Solicitor General Tushar Mehta appearing for the government that no further adjournment would be entertained in the case.

The court was dealing with a PIL filed by a UP-based businessman Gajendra Sharma seeking a waiver of interests  and also the interest on interest being sought to be levied by the banks.

A large number of interveners have also sought an extension of the moratorium on loans that ended on August 31 to a further six months or a one-year period.

The bench, also comprising Justices R.Subhash Reddy and M.R.Shahd, however, refrained from passing any order on a plea by an advocate appearing for an intervener to restrain banks from making any threatening calls to the customers to pay the loan with interest. 

Enhanced borrowing facility

The RBI has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021.  

The RBI had increased the borrowing limit forbanks under the marginal standing facility (MSF) scheme from 2 per cent to 3 per cent of their Net Demand and Time Liabilities (NDTL) with effect from March 27, 2020. The facility, which was initially available up to June 30, 2020 was later extended up to September 30, 2020.