The Ministry of Finance has filed an affidavit before the apex court which had asked the Centre and the RBI to review the move to charge interest on EMIs and interest on the interest during the moratorium period introduced under the scheme due to the COVID-19 pandemic.
Centre in the process of identifying sectors to assess impact of Covid-19 and disburse varying benefits, Mehta said.
Solicitor general Tushar Mehta told the Supreme Court on Tuesday that the moratorium period for repayment of loans can be extended by up to two years as per the Reserve Bank of India (RBI) circular.
Mehta, representing the Centre and RBI, submitted that, â€œWe are in the process of identifying the distressed sectors to vary benefits as per the impact of hit they have taken.” The Centre also apprised the bench that it has filed a reply as to its powers under the Disaster Management Act.
The apex court on 26 August had lashed out at the central government for not filing the affidavit in time with respect to the governmentâ€™s decision on whether interest can be waived or, whether it can stop charging interest on interest accrued during moratorium period. The Centre had to clarify its position under the Disaster Management Act (DMA) and file an affidavit entailing its power.
Mehta suggested that a meeting of representatives of central government with RBI and other banks should be held to come up with a proper solution. The court shall hear at length the bunch of petitions demanding waiver of interest, or waiver of interest on interest on the suspended EMIs during moratorium period on today.
Moratorium basically means you don’t have to pay your EMIs for that time period and no penal interest will be charged. It is not a concession of any kind and is simply a deferment of the payment to provide some relief to borrowers facing liquidity issues.