The six-month moratorium period announced in the wake of coronavirus outbreak in the country is extendable upto two years, said solicitor general Tushar Mehta to Supreme Court.
The law officers sought time from the Centre and RBI to decide on the issue of accrued interest being charged by the banks during the moratorium offered from March to August 2020.
A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah allowed Mehta’s plea and put the matter for consideration on Wednesday.
In Mehta’s submission, he said that the RBI and Centre are in process of identifying distressed sectors to vary the benefits as per the effect since the GDP is also down by 23%. According to Mehta, an affidavit has also been filed in the court on the issue of charging interest during moratorium period.
In an affidavit, the Finance Ministry said besides concessions in the rate of interest, the framework under RBI’s circulars issued on August 6, 2020 also permits lenders to allow moratorium of up to two years, the irrespective of current six month period ending on August 31.
“This extended moratorium becomes part of an individualised solution for a borrower and is made available along with other interventions. The RBI framework is specific to the situation arising out of the pandemic. Thus, a borrower, who is fearful of being in default as on September one and becoming an NPA soon thereafter, could continue to avail moratorium as a part of the resolution plan implemented in terms of the above circular,” said the affidavit issued by the Finance Ministry.
According to a PIL filed by Gajendra Sharma, the supreme court had pulled up the Centre for “hiding behind the RBI” and asked it to take decisions on charging of interest on loans during the moratorium peroid offered by he RBI.