The Reserve Bank of India (RBI) has asked the Supreme Court to not consider the plea for the waiver of interest, in addition to the six month moratorium announced by RBI. If SC asks RBI to write off the interest, it would lead banks across the nation to lose INR 2 Cr. RBI has also warned the Supreme Court that this would create far reaching problems in the country’s financial situation.
While commenting on the interest waiving scheme, RBI maintained that banks in the country need to do their best to protect the interest of investors and ensure the financial stability of the country. Adding that loan interest is the main source of income for banks, RBI said that waiving of interest can’t be considered as an option for the ongoing cash crunch of people, who have availed various loan schemes from banks. The first phase of the moratorium was announced by the RBI for repayment of loans between March 1 and May 31; subsequently, it was further extended to August 31. With this, the total period of moratorium sanctioned by the RBI has reached six months.
