SC seeks finance ministry’s response on interest waiver
PIL urges to waive off interest on deferred EMIs during moratorium
The Supreme Court on Thursday sought reply from the Union finance ministry on a plea seeking waiver of interest on the deferred loans during the moratorium period as Reserve Bank of India opposed it saying that it is not prudent to go for “forced waiver” as it would affect the financial stability of the banks.
A bench comprising Justice Ashok Bhushan, Justice Sanjay Kishan Kaul and Justice M.R. Shah sought reply from the finance ministry as Justice Bhushan said that there are two issues in this — no interest during moratorium period and no interest on interest.
As Justice Bhushan flagged two issues, Justice Kaul said that “these are not normal times”. Observation from Justice Bhushan and Justice Kaul came in view of RBI’s stand that “it does not consider it prudent or appropriate to go for a forced waiver of interest, risking the financial viability of the banks it is mandated to regulate, and putting the interests of the depositors in jeopardy.”
The apex bank said this in response to a PIL by one Gajendra Sharma, seeking direction to declare that part of the RBI’s March 27 notification “as ultra vires to the extent it charges interest on the loan amount during the moratorium period, which creates hardship to the petitioner being borrower and creates hindrance and obstruction in ‘right to life’ guaranteed by Article 21 of the Constitution of India”.
Telling the court that “cat is out of bag”, senior counsel Rajiv Dutta said that for them the profitability of the banks was a prime concern.
Appearing for the petitioner
Gajendra Sharma, Dutta referred to an earlier order of the top court passed in Air-India middle seat matter. Even before Dutta could have quoted the sentence from that order, Justice Bhushan cited it saying “Economic aspect not higher than public health”
Seeking to file rejoinder to the reply by the RBI, Dutta said: “So only the banks should earn and rest of the country goes down under?”