Loan Moratorium Case: Loan lenders should not charge interest for loans
The top court of the country, the Supreme Court on Tuesday heard a bunch of petitions filed by the trade unions pertaining to the issues like an extension of the loan moratorium and the waiver of the interest.
The Supreme Court delivers its verdict that the moratorium cannot be extended further and maintained that the compound interest, the interest charged on the interest of the loan amount should not be charged.
The Supreme Court bench opined that there is no justification for the Union governmentâs decision to not charge interest for the loans below Rs 2 crore and said irrespective of the loan amount no interest should be charged.
If the loan lenders have already charged any amount as the interest from the loan borrowers the amount shall be credited to them or adjusted in the next installments, the Supreme Court bench said.
During the argument, the three-judge bench of the Supreme Court said that reliefs like a complete waiver of the interest or the extension of the loan moratorium might have consequences on the economy.
The Reserve Bank of India (RBI) announced a moratorium period for the loan installments from March to May. Later, the RBI extended the moratorium period till August 31. An option was provided for the loan borrowers to defer the EMI payments.
In October last year, the Union Government has announced a loan waiver of interest for the amount below Rs 2 crore. Only selected loans below Rs 2 crore were barred from paying the interests.
The Supreme Court delivers its verdict that the moratorium cannot be extended further and maintained that the compound interest, the interest charged on the interest of the loan amount should not be charged.
The Supreme Court bench opined that there is no justification for the Union governmentâs decision to not charge interest for the loans below Rs 2 crore and said irrespective of the loan amount no interest should be charged.
If the loan lenders have already charged any amount as the interest from the loan borrowers the amount shall be credited to them or adjusted in the next installments, the Supreme Court bench said.
During the argument, the three-judge bench of the Supreme Court said that reliefs like a complete waiver of the interest or the extension of the loan moratorium might have consequences on the economy.
The Reserve Bank of India (RBI) announced a moratorium period for the loan installments from March to May. Later, the RBI extended the moratorium period till August 31. An option was provided for the loan borrowers to defer the EMI payments.
In October last year, the Union Government has announced a loan waiver of interest for the amount below Rs 2 crore. Only selected loans below Rs 2 crore were barred from paying the interests.