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This is an archive article published on June 13, 2020
Apex court seeks clarity on RBI moratorium on loans
A bench of Justices Ashok Bhushan, S K Kaul and M R Shah asked the Finance Ministry and RBI to hold a meeting within three days.
The Supreme Court will hear the matter again on June 17.
The Supreme Court Friday asked the government to clarify whether interest will charged on the interest on loan instalments for deferred payments allowed by RBI in the wake of the lockdown.
A bench of Justices Ashok Bhushan, S K Kaul and M R Shah asked the Finance Ministry and RBI to hold a meeting within three days.
The bench told Solicitor General Tushar Mehta, “…Our concern in these proceedings is only whether the interest that has been deferred for 3 months will be added to charges payable later and whether there will be interest on the interest.” Mehta said he has sought a meeting with RBI.
The bench told him, “If the RBI reply goes much beyond the query posed by us there will be a lot of opinions on it. Efforts will be made to sway it one way or another. Our query was limited. Whether the payment will impose interest on interest.”
Petitioner Gajendra Sharma urged the court to declare as ultra vires the part of the March 27 notification issued by RBI about charging interest “which creates hardship in the present scenario of complete national lockdown being extended from time to time due to covid-19 outbreak”.
The Supreme Court will hear the matter again on June 17.
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