2-yr pause on repayment likely

Centre asks SC to allow RBI and banks to decide on interest

New Delhi, Sept. 1: The moratorium period on the repayment of loans during the Covid-19 pandemic is “extendable” by two years and several steps have been taken to help the stressed sectors, the Centre and the RBI told the Supreme Court on Tuesday.

A bench headed by Justice Ashok Bhushan was informed by Solicitor General Tushar Mehta, appearing for the Centre and Reserve Bank of India, that the economy contracted by nearly 24 per cent in the April-June quarter due to coronavirus-related lockdown and restrictions.

The bench, also comprising Justices R.S. Reddy and M.R. Shah, said it would hear on Wednesday the pleas which have raised the issue of interest being charged on instalments which have been deferred under the central bank’s scheme during the moratorium period.

At the outset, Mehta told the bench that the Centre has filed its affidavit in the matter.

When the court said that it has not yet received the affidavit, he said the bench should look into it and the matter be listed after twothree days.

Mehta said several steps have been taken for stressed sectors. “Let the Central government, RBI and bankers should put their heads together on the aspect of interest on interest,” he said.

“The moratorium is extendable by two years,” he added.

Mehta said that authorities have utilised the time and narrowed down the issue to the point on interest.

“There are stressed sectors and national economy has contracted by 23 per cent,” Mehta said, adding, “I have filed the affidavit and heavens will not fall if the matter is taken after two-three days or tomorrow”.