Supreme Court said that the central government cannot hide behind the RBI.
The Supreme Court on Wednesday asked about the government’s stand on waiving interest on loan repayments during the moratorium. The top court said that the central government cannot hide behind the Reserve Bank of India and should not look at business interest only. The court directed the central government to make its stand clear by September 1.
The top court was hearing petitions that wanted waiver of interest to be levied on loan repayment during moratorium period in lockdown.
A bench headed by Justice Ashok Bhushan said, “This happened because you locked down the entire country. You have to tell us your stand on two things: disaster management act and if the interest on interest will be accounted for.
When the top court asked about the government’s stand Solicitor General Tushar Mehta said, “There cannot be a solution which is one-size fits all.”
Other Judge on the bench Justice M.R. Shah said, “Mr. Mehta this is not the time to think about business only.”
The petitioners wanted some portion of RBI notification issued on March 27 be cancelled to the extent on charging interest on loan during moratorium. They said this interest creates hardship, hindrance and objection in right to life guaranteed under the constitution.
The RBI had informed the court earlier that there cannot be an interest waiver during moratorium on term loan repayment as such a move will put the financial health and stability of banks at risk.
