No EMI For 2 Years? Govt Wants To Extend Loan Moratorium For 2 Years

Centre to Supreme Court that EMI moratorium on repayment of loans can be extended upto 2 years.
Centre to Supreme Court that EMI moratorium on repayment of loans can be extended upto 2 years.

We have a follow up news on the moratorium on repayment of loans allowed by the government due to the coronavirus pandemic.

The Centre and RBI informed the Supreme Court on Tuesday that this moratorium period on repayment of loans can be extended by another two years.

The RBI in June extended the moratorium until August 31, 2020, allowing individuals to defer their EMI payment on term loans amid the pandemic, for 6 months.

What Does the Centre have to Say on This?

The Solicitor General Tushar Mehta, representing the Centre and the Reserve Bank of India (RBI) told the Supreme Court bench, headed by Ashok Bhushan that the both the parties are invested in the process of identifying the stressed sectors to vary benefits according to the impact of the hit they have taken.

He told that RBI and the bankers’ association were under constant discussions regarding the issue of interest deferment during the moratorium period. 

 “There are more issues involved, GDP is down 23% and the economy is stressed”, said Mehta.

What is SC’s Take on This?

 The Supreme Court said that it will have a hearing about this, along with several other petitions, like waiver of interest, or waiver of interest on interest on the suspended EMIs during the moratorium period.

To fill you in, while the Centre announced moratorium on repayment of loans and the letting individuals defer their EMI payments until 6 months, the SC had asked the Centre and RBI to charge interest on EMIs during this moratorium period.

However, the RBI informed the Supreme Court that there was no use of charging such interests on interest for the deferred EMI amount, as this would affect the financial health and stability of banks.

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