Moratorium period on loan repayment extendable by two yrs: Centre tells SC

Amid the COVID-19 pandemic, the Centre and RBI on Tuesday told the Supreme Court that the moratorium period on repayment of loans is extendable by two years. The apex court had earlier asked the Centre and the RBI to review the move to charge interest on deferred EMIs during the moratorium period.

New Delhi:The Centre and RBI Tuesday told the Supreme Court that the moratorium period on repayment of loans amid the COVID-19 pandemic is extendable by two years.

A three-judge bench of the apex court, headed by Justice Ashok Bhushan, was hearing two pleas filed Gajender Sharma and lawyer Vishal Tiwari seeking to extend the moratorium period to help borrowers in deferring their EMI payment on term loans amid the pandemic.

Solicitor General Tushar Mehta, appearing for the Centre and the Reserve Bank of India (RBI), told the bench that several steps have been taken for stressed sectors and the economy has contracted by 23 percent due to the pandemic.

The bench said that it will hear the matter tomorrow, after the Union of India, through the Solicitor General, files its reply in the moratorium issue. Mehta said that the affidavit was filed on Monday online.

The bench said that it has not received the affidavit yet. "The lordship may go through it, the matter may be taken up tomorrow or day after tomorrow. The interest on interest part, we have discussed with the RBI officers," Mehta said.

Let the Union of India, Reserve Bank of India, and others sit together and find out a proper solution, the bench said, to which Mehta submitted no adversarial step are being taken.

"I am saying with a great sense of responsibility. Harish Salve also spoke with the bankers association. Most of the issues are addressed," the Solicitor General said.

"We have also to hear the interest in interest part also," said Justice MR Shah, one of the judges in the three-judge bench hearing the matter.

Vishal Tiwari, one of the petitioner, said that it is a public interest matter and he will be there tomorrow also before the apex court and argue for the extension of the moratorium period.

The top court had last week tagged the two petition filed by Tiwari and Sharma respectively. While Tiwari in his plea sought directions to extend the moratorium period to help borrowers in deferring their EMI payment on term loans amid the pandemic, Sharma's plea sought directions for waiver of interest on the loan repayment during the moratorium.

(With PTI and ANI Inputs)