The Constitution bench of Supreme Court comprising Justices Ashok Bhushan, MR Shah, and SK Kaul which heard the cases of the moratorium period announced by Centre gave time to Reserve Bank of India and the finance ministry to file a response plea jointly.
Hearing the case the apex court said that the economic aspect cannot be higher than the health of the people.
The case came to hearing with the Reserve Bank of India(RBI) filing a counter affidavit and saying that it is not eying the move to waiving the interest of the loans forcibly as this move has the potential to hinder the financial viability of the banks.
Going into detail, the Central bank announced an extension of the moratorium on the term loans till the 31st of August keeping in mind the nationwide lockout which was imposed in the wake of the spread of the pandemic.
However, on the 26th of May, the Supreme Court asked the RBI to respond to the plea on the interest waiver on the moratorium on the term loans announced by the Central bank.
Justice Ashok Bhushan found two issues in the plea. The first thing is whether interest should be charged during the moratorium period and the second thing is whether interest should be charged on the accrued interest.
On the other hand, the Supreme Court slammed the Reserve Bank for leaking the information to media before filing an affidavit.The Court also found fault with charging interest by announcing the moratorium on the term loans.