Supreme Court extends interim order on loan moratorium till 28th September 2020
The Supreme Court on 10th September 2020 ordered interim extension of loan moratorium till 28th September 2020. The Supreme Court directed the banks not to tag any loans as non-performing till further directions. The interim order was passed by the apex court while hearing a batch of petitions seeking waiver of interest, or waiver of interest on interest on the suspended EMIs during the extended moratorium period amid the nationwide lockdown due to the covid-19 outbreak.
In March, The Reserve Bank of India (RBI) had allowed a three-month moratorium from paying EMIs and other loans on payment of all term loans due between 1st March 2020 and 31st May 2020. The Reserve Bank of India (RBI) had on 22 May extended moratorium on term loans till 31st August 2020 amid the nationwide lockdown due to covid-19.
On 3rd September 2020, the court had passed an interim direction holding that the accounts not declared as non-performing asset (NPA) as on 31st August 2020 shall not be declared as NPAs till further orders by Apex Court.
The apex court adjourned the case for the last time, granting the Centre, Reserve Bank of India (RBI) and banks a time of two weeks to work together and file a concrete reply on their stand on waiving of interest charged during the moratorium period. The apex court will continue hearing in the case on 28th September 2020.
The court said in its order that:
“We are inclined to grant two weeks to file appropriate affidavit. We make it clear that we shall consider different prayers made by petitioners on the next date. All decisions taken by the RBI, GOI or the banks should be placed before the Court for consideration,".
The order also noted that an expert committee had been constituted to look into all the issues and action will be taken by the government.
