Supreme Court said that the central government cannot hide behind the RBI.
The Supreme Court on Wednesday sought the government’s stand on waiving interest on loan repayments during the moratorium period. The top court said the central government cannot hide behind the Reserve Bank of India and should not look at business interest alone, and directed the Centre to make its stand clear by September 1.
The top court was hearing petitions that wanted waiver of interest on loan repayment during moratorium period, announced due to the coronavirus lockdown. The moratorium is due to end on August 31
A bench headed by Justice Ashok Bhushan said, “This happened because you locked down the entire country. You have to tell us your stand on two things: disaster management act and if the interest on interest will be accounted for.
When the top court asked about the government’s stand, Solicitor General Tushar Mehta said, “There cannot be a solution which is one-size fits all.”
Justice M.R. Shah said, “Mr. Mehta, this is not the time to think about business only.”
The petitioners wanted cancellation of some portion of RBI notification issued on March 27 cancelled to the extent that it charges interest on loan during the moratorium period. They said this interest creates hardship, hindrances and objection in right to life guaranteed under the constitution.
The RBI had informed the court earlier that there cannot be an interest waiver during moratorium on term loan repayment as such a move will put the financial health and stability of banks at risk.
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