On Thursday afternoon, the Supreme Court had extended the moratorium for loan repayment. The extended date is September 28, 2020. Due to the non-payment of the installments at the time of the pandemic, the order remains functional, directing the banks not to declare any loan as a Non-Performing Asset (NPA).

On August 31, 2020, the former deadline of the loan repayment suspension had ended. The scheme had been introduced to help the borrowers cope up with the financial setback due to the Covid-19 crisis. As per this policy the borrowers had been spared from repaying their loan up to a period of 6 months.

Senior Advocate Rajeev Dutta queried that where exactly the relief for the borrowers is.  Loans are simply being restructured, which should have been done earlier. On top of it the compound interest is still being charged. He further added that lakhs of people were in hospitals for their sufferings; many people have lost their sources of income. He asserted that the Central Government should make their stand clear, decide on relief on the issue of the moratorium and waiving of interest on interest and others if it felt so.

The Reserve Bank of India and the Centre also informed the Supreme Court that the moratorium period is extendable by two years.

Solicitor General (SG) Tushar Mehta who appeared for the Centre and the RBI stated that the central bank and government are in the process of identifying the distressed sectors to vary benefits as per the Covid-19 impact of the hits that they have taken. This statement was made by him to a panel headed by Justice Ashok Bhushan. He also added that steps have been taken concerning the rapidly contracting economy and stressed sectors of the country.

Supreme Court had declared that the final decision will be made on Wednesday, September 11, 2020.  A group of petitions will be heard with aim at waiving interests on the suspended Equated Monthly Installments (EMIs) in the loan repayment moratorium time-period.

The Supreme Court had also stated that there is “no merit in charging interest on interest” for the exempted loan payment EMIs during the time of the Covid-19 pandemic.