Supreme Court Grants Relief to Borrowers, Extends Loan Repayment Moratorium till Sept

The Supreme Court on Thursday, 10 September, 2020 virtually extended the loan moratorium period till September 28, granting relief to borrowers. The top court extended the interim order, in which it had directed the banks not to declare as NPAs accounts that are unable to make repayments, till further orders.

"Accounts not declared NPA as on August 31 shall not be declared NPA till further orders,” the apex court bench led by Justice Ashok Bhushan had declared in its interim order.

The Centre said an expert panel has been set up to look into the issue of interest being charged by banks on instalments deferred during the moratorium period due to the COVID-19 pandemic.

The top court granted two weeks to the Centre and Reserve Bank of India (RBI) to file the affidavit and place before it the decisions taken in this regard.

A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah posted the matter for further hearing on September 28 and said that the court expects that the government and RBI actively consider all the issues.

The bench clarified that it was giving one last opportunity and thereafter the matter will not be adjourned.

The top court was hearing a batch of pleas which have raised the issue of interest being charged on instalments which were deferred during the moratorium period due to the COVID-19 pandemic.

Solicitor General Tushar Mehta, appearing for the Centre said that the government at the highest level is considering all issues raised in the batch of petitions and within two weeks, appropriate decision will be taken with regard to the problems faced by different sectors during the pandemic.

To soften the economic blow caused by the pandemic the banking regulator had mandated banks to grant a moratorium on paying interest dues for a period of three months till May. This was later extended till August 31.