The Supreme Court Tuesday issued notices to the Centre and Reserve Bank of India (RBI) on a plea against charging of interest on loans during the moratorium announced in connection with the lockdown.
On March 27, the RBI had first announced a 3-month moratorium on all loans — including home and term loans — and outstanding credit card dues for three months. The provision gave people the option to defer loan payments for three months, but it had effectively increased the number of monthly installments as the moratorium does not offer any discount on interest payout. However, the credit history of the customers and their accounts will not be tagged as Non Performing Assets (NPAs).
Last week, alongside the cut in its key policy rates, the central bank also extended its moratorium on loan repayments by another three months to August 31 to tackle the economic fallout from the ongoing nationwide lockdown to contain the spread of Covid-19.
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