New Delhi: The Supreme Court will today pronounce verdict on a batch of pleas by various trade associations, including from real estate and power sectors, seeking extension of loan moratorium and other reliefs in view of the COVID-19 pandemic. A bench headed by Justice Ashok Bhushan which had reserved its verdict on the batch of pleas on December 17, last year, will pronounce the judgement.Also Read - Navjot Singh Sidhu, Given 1 Year Jail in Road Rage Case, Lodged in Patiala Jail After Surrender
Earlier, the Central government had submitted before the Supreme Court that if it were to consider waiving interest on all the loans and advances to all categories of borrowers for the six-month moratorium period announced by RBI in view of COVID-19 pandemic, then the amount foregone would be more than Rs 6 lakh crore. Also Read - Gyanvapi Mosque Row: SC Stays Interim Order On Securing Shivling, Transfers Case to Varanasi District Judge
The Centre had also stated that if the banks were to bear this burden, then it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the lenders unviable and raising a very serious question mark over their very survival. IN its reply to the top court, the Central government said this was a main reason as to why waiver of interest was not even contemplated and only payment of instalments was deferred. Also Read - CBI Registers Rs 230-crore Bank Fraud Case Against Amrapali Leisure Valley | Know Why Here
On November 27 last year, the supreme court had asked the Centre to ensure that all steps be taken to implement its decision to forego interest on eight specified categories of loans paid up to Rs 2 crore in view of the coronavirus pandemic. The apex court had also noted that the moratorium period as granted by the Reserve Bank of India continued from March 3 to August 31, six months.
It had said the COVID-19 pandemic has not only caused serious threat to the health of the people but has also cast its shadow on the economic growth of the country as well as other countries in the entire world.
The Centre has promulgated emergency credit-linked guarantee scheme (ECLGS) of Rs 3 lakh crore providing additional credit at lower rate of interest, with 100 per cent government guarantee and no fresh collateral. However, the scheme has been extended with higher financial limits to twenty seven COVID-19 impacted sectors including restaurant and hotel sectors.
The eight categories of loans are MSME (Micro, Small & Medium Enterprises), Education, Housing, Consumer durable, Credit card, Automobile, Personal and Consumption.
The RBI had on March 27 issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1 and May 31, 2020, due to the pandemic. Later, the moratorium was extended till August 31 this year.
(With inputs from PTI)