NEW DELHI: Irked by the Union government’s delay in taking a stand on whether interest could be levied on interest accrued on EMIs during the moratorium period till August 31, the Supreme Court on Friday asked officials of
the finance ministry
and the Reserve
Bank of India
to meet and come up with a solution to this vexed issue troubling lakhs of borrowers.
The RBI had earlier said that waiver of interest on EMIs during the moratorium period would hurt the banking industry and prove counter-productive for depositors, as the bank acts as an intermediary between depositors and borrowers. A bench of Justices Ashok Bhushan,
Sanjay Kishan Kaul
and MR Shah said the RBI’s response went way beyond the court’s query. “We had asked not for waiver of interest on the outstanding principal amount of loan during moratorium on EMIs. We had simply asked whether during the moratorium on repayment, can the banks charge interest on the interest accrued on the outstanding principal amount. On postponed EMIs, interest will be charged during the moratorium period. Can that interest component be added to the principal and further interest be charged on it?” it asked.
general Tushar Mehta said he had detailed discussions with the RBI and finance ministry officials separately and would like to have a joint meeting with them to iron out the issue.
SBI intervened in the proceedings and through advocate
told the bench, “SBI is also of the firm view that interest cannot be waived during the period for moratorium on EMIs.”