SC seeks Centre, RBI reply on loan moratorium by Oct 12

The Supreme Court on Monday expressed its dissatisfaction with the Union government's response on granting waiver off interest on interest on loan during the Covid-19 induced six-month moratorium period.

A bench presided over by Justice Ashok Bhushan pointed out so far, no circular has been issued either by the RBI or any other authority.

The court also said the Kamat committee report in the matter has so far not been brought on record or considered.

It granted one week's further time to the Centre, RBI and other banks to file a consolidated response in the PIL filed by Gajendra Sharma and others. The court posted the matter for consideration on October 13.

Last week, the Union government told the court that it decided to waive off "interest on interest" on loans upto Rs 2 crore during the six-month moratorium period.

It also informed the court that more than 50 percent borrowers have not availed the moratorium, and if waiving interest on all loans and advances was considered then it would have to forego excess of Rs 6 lakh crore.

During the hearing, senior advocate Kapil Sibal contended that a lot of figures cited in the Centre's affidavit were without any basis. He sought permission to place facts on record.

Senior Counsel C A Sundaram pointed out the affidavit eliminated the real estate sector from consideration.

Solicitor General Tushar Mehta submitted ther was nothing to hide in the matter and the Kamat committee report can be put on record.

Senior advocate, V Giri for the RBI, said the Kamat committee was constituted by the RBI. At the highest level, certain decisions were taken even during the pendency of the matter. A large number of people have felt that the interest of interest was hitting them hard. There are more deliberations and recommendations to be made.

Senior Counsel Harish Salve for the Indian Banks Association submitted that the delay was hurting the Banks.

Senior advocate Rakesh Dwivedi sought to highlight the woes of the builders.