NEW DELHI: Hours after the Supreme Court gave the Centre two more weeks to frame its position on the loan moratorium, the Union finance ministry constituted an expert committee to make an overall assessment on waiver of interest on interest.
The committee will be chaired by former Comptroller and Auditor General of India Rajiv Mehrishi and will have Ravindra H Dholakia, former member of the RBI’s Monetary Policy Committee, and B Sriram, former managing director of SBI and IDBI Bank, as members.
The panel will submit its report in a week.
On Thursday, the Supreme Court extended its previous order on loan moratorium, saying accounts that have not been declared non-performing assets (NPAs) as on August 31 cannot be declared as such until further notice.
The interim order will continue until the next hearing on September 28.
A bench headed by Justice Ashok Bhushan, while giving the Centre time to make a decision, said the court is inclined to pass an order against charging interest on interest as it viewed it as a penal interest.
During the hearing, Solicitor General Tushar Mehta sought time to file a comprehensive affidavit on the decisions taken so far.
The bench accepted his plea and asked him to place all decisions taken by the RBI and the banks before it for further consideration.
“A decision must be taken after considering the interest of all classes of creditors and all the sectors of the economy,” the court told Mehta. Initially, the bench was keen to pass an interim order, but it refrained from doing so after the Centre and the banks’ association requested the judges not to do so.