New Delhi: The central government today opposed the waiver of interests on all kinds of loans during the loan moratorium period saying that it would lead to a loss of Rs 6 lakh crores. Solicitor General (SG), Tushar Mehta, told the court that the centre has taken whatever steps it could take but it can not waive off interests for everyone.
The bench led by Justice Ashok Bhushan was hearing a batch of pleas pertaining to compound interest waiver during the loan moratorium period. The centre had submitted an affidavit in the court earlier saying that it will bear the burden for loans up to Rs 2 crores and had informed steps taken for all the other sectors.
Today the SG told the court that middle class, lower middle class and big corporates who want waivers had issues even before COVID-19 pandemic and the crisis might have escalated their problems, adding interest waiver was never the solution. Adding on further he said that moratorium was misconstrued by many, its deferment and not waiver which around half of the borrowers knew and didn't avail the moratorium.
The Supreme Court observed that the government needs to undertake more initiatives as there are certain conditions by which the benefits given by the Reserve Bank of India (RBI) is taken away and a majority of people are deprived of them.
With regards to the issue of charging compound interests, the SG said that it is between the bank and the depositors.
The SG explained to the court that borrowers will have to pay compound interest because it is a chain. If the interest is waived off, either the bank or the government has to bear its burden, he said.
The Government had to pay interest from its own funds as some people had taken moratorium, submitted SG.
The court will hear the matter again on December 9.
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