The Supreme Court on Thursday questioned the RBI for levying interest on loans during the period of moratorium. It further asked the Ministry of Finance for its response on whether the interest could be waived or should it continue during the moratorium period.
The matter came up in the Supreme Court after the Reserve Bank of India said the waiver of interest charges on EMIs during moratorium will lead to loss around Rs. 2 lakh crore.
In view of the COVID-19 pandemic, the RBI had issued a circular on March 27 allowing banks to grant a moratorium to borrowers on payment of instalments for a period of three months.
The three-member bench, comprising Justices Ashok Bhushan, Sanjay Kishan Kaul, and MR Shah, said, "These are challenging times. It is a serious issue as on the one hand moratorium is granted and on the other hand, interest is charged on loans”.
The moratorium is intended to provide borrowers some relief during the COVID-19 outbreak.
The bench also expressed discontent that RBI's reply was leaked to the media before the matter came before the court.
The top court will next hear the matter on June 12.
