Supreme Court rejected the Rejects the Complete Interest Waiver on Loan and extension of loan moratorium relief – In a big relief to Banking sectors, the Supreme court of India has ruled out the extension of any Loan Moratorium. The supreme court has delivered the judgement in this regard and ordered the complete waiver of compound interest of all borrowers.
Earlier, Reserve Bank of India (RBI) had not included the personal loan exceeding Rs 2 crore under the ambit of loan moratorium announced by the central bank. The top court has directed RBI that financial bodies must refund or adjust the penal interest for all borrowers.
Earlier petitioners in the loan moratorium case sought waiver from interest on interest against the EMIs that were not paid by them during COVID-19 pandemic while availing the loan moratorium scheme announced by the Reserve Bank of India last year.
> There is no justification for waiving compound interest only on loans of up to Rs 2 crore. There shall be no interest on interest or compensation interest during moratorium period for all borrowers, irrespective of the loan amount. If any such amount has been collected it shall be refunded.
> Justice MR Shah said: “Courts are not advisers to the executive on matters of economic policy. Pandemic affected all sectors and govt had to take measures such as providing transport to migrants, etc. Even govt had no support during Pandemic and even GST loss that was incurred.
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