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SC pulls up Centre for 'hiding behind RBI' on interest waiver during moratorium

The court's observation came after Solicitor General Tushar Mehta referred to the RBI's affidavit in the matter, and said the banking institutions are also distressed.

Published: 26th August 2020 05:30 PM  |   Last Updated: 26th August 2020 05:30 PM   |  A+A-

Supreme Court

Supreme Court (File Photo | PTI)

By Express News Service

NEW DELHI: The Supreme Court on Wednesday said the Central government is hiding behind the RBI and not clarifying its stand on whether there should be some relief in the form of waiver to those who have availed loans in midst of the Covid-19 pandemic.

“You make your stand clear. You cannot say anything. It is your responsibility to take steps under the Disaster Management Act. You have enough powers to decide the issue of waiver. You cannot just depend on the RBI,” the bench headed by Justice Ashok Bhushan said.

The court's observation came after Solicitor General Tushar Mehta referred to the RBI's affidavit in the matter, and said the banking institutions are also distressed.

“The problem was created by your (Centre) lockdown. This isn't the time to take care of only the business interests but you must also consider the plight of the people. That's how RBI's stands looks like and you are not taking any stand at all,” the bench said.

At this, Mehta said that these observations may have some repercussions against the government, which has been issuing all necessary directions against the Disaster Management Act.

“Then you must take a stand. Whether any interest should be charged and whether any interest on interest should be charged during the moratorium period,” the bench said while giving Centre one week time to file its affidavit and take a categorical stand in the matter.

Earlier in June, RBI had filed an affidavit before the SC stating that it would not support the move to waive off interest, as it could affect the financial viability of banks. The moratorium announced by RBI expires on August 31.

The petition, which was filed by Gajendra Sharma, an Agra resident, had demanded a waiver on interest charged by banks citing the relief announced by RBI on the payment of equated monthly instalments (EMIs) between March and August 31 due to the pandemic.

Petitioner Sharma specifically cited RBI’s March 27 and May 22 notifications announcing a moratorium on loan repayments while permitting banks to levy interest.



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