No EMI for Two Years: Govt Plans to Extend Loan Moratorium
A good news is on the way. The central government has asked the Supreme Court of India to extend the loan moratorium for the next two years. The announcement comes after the deadline for temporary relief ended on August 31.
Earlier, the Reserve Bank of India had allowed banks and other financial institutions to provide a six-month loan moratorium to borrowers on their EMI repayments.
Loan Moratorium Extension: What’s the Take of Government?
Talking about the decision, solicitor general Tushar Mehta who represented the centre in the court said, “We are in the process of identifying the distressed sectors to vary benefits according to the impact of the hit they have taken.”
He also stated that the Centre and RBI along with other bank associations are trying to identify the distressed sector to devise various relief plans which are sector-specific instead of being one-for-all plan.
In addition, the government has also claimed that it has filed an affidavit which stated that the National Disaster Management Authority has taken cognizance of the issues and sent its ‘Views and Recommendations’ to RBI.
Notably, the loan includes all kinds of retails products such as home, vehicles, personal loans, agricultural loans and others. During the moratorium period, individuals were not charged with EMI.
Hearing to Happen Soon
Noting on the government’s suggestion, the Supreme Court has stated that it will have a hearing regarding the matter.
The court is also looking into various other petitions such as waiver of interest on interest on the suspended EMIs during the moratorium period. A petition filed with Gajendra Sharma sought a waiver of interest on the principal amount. The petition has argued that no interest should be charged since people are already facing a severe financial crisis due to COVID-19 pandemic.
The hearing bench was headed by Justice Ashok Bhushan. Final decisions on these petitions and centre’s take on loan moratorium extension will be taken in the next hearing.
We will update you as soon as there is any further development in the story.