Money Management

SC will hear new plea for the extension of the loan moratorium program until the end of the year

The Supreme Court ruled on Friday to hear a new plea asking for the extension until last December of the RBI’s moratorium program to provide a facility for deferred payment of term loan payments to borrowers due to the COVID-pandemic. 19.

A bench led by Judge Ashok Bhushan, in a hearing conducted by videoconference, ordered the marking of the new plea filed by lawyer Vishal Tiwari with the pending petition on the matter.

The Reserve Bank Of India released the notification in March after the nationwide lockdown was imposed to curb the spread of the pandemic and gave the option to defer payment of installments to borrowers and now the program ends on August 31 .

The lawyer told the judiciary, which also included Justices R Subhash Reddy and MR Shah, that the negative impact of the pandemic on the financial situation was still there and, therefore, the moratorium program should be extended until ‘at the end of the year.

From now on, the plea will be heard alongside that filed by Gajendra Sharma, a resident of Agra, who is due to be heard on September 1.

On August 26, the Supreme Court heard Sharma’s plea and observed that the Center was hiding behind the RBI and asked them to respond within a week on the issue of interest charged on deferred installments under the RBI. of the central bank’s plan during the moratorium period amid the COVID-19 lockdown.

The Supreme Court previously asked the Center and the Reserve Bank of India (RBI) to review the decision to charge interest on IMEs during the moratorium period introduced under the program due to the COVID-19 pandemic .

The highest court had said there was “no merit in charging interest on interest” for deferred loan payments during the moratorium period announced following the COVID-19 pandemic.

Sharma requested an instruction to declare the part of the RBI’s March 27 notification “ultra vires as it charges interest on the loan amount during the moratorium period and said this created difficulties for the petitioner. as a borrower and created hindrances and obstruction in the “right to life” guaranteed by article 21 of the Constitution of India “.

He also called on the government and the RBI to provide loan repayment relief by not charging interest during the moratorium period.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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