This observation is in view of a petition challenging the Reserve Bank’s order to allow banks to pay interest at the moratorium period. The economic status of the country is not greater than the health of the people, the court said. The Reserve Bank of India (RBI), in its affidavit, said it would not compel banks to waive interest and that such action would jeopardize the banking sector.
The Supreme Court had on May 26 issued notice to the Reserve Bank seeking clarification in the case. In response, the RBI issued a statement. In an affidavit issued on Wednesday, it is clear that banks cannot be forced to write off interest. The interest rate on loans during the moratorium period would be Rs 2.01 lakh crore, the Reserve Bank said. This is one per cent of India’s Gross Domestic Product (GDP). The waiver will affect the financial stability of the banks.
The moratorium has been announced for a period of six months in the wake of the closure. The moratorium is merely a deferral of credit payments. Other than that the loan repayment at that time would not be waived. Repayment of loans and interest is subject to the jurisdiction of the respective bank. The moratorium was announced to provide relief to various sectors during the financial crisis. Asking banks to write off interest is not proper. The RBI’s affidavit also states that the bank’s income, commercial viability and the interests of investors should be provided in the interest of lenders.
Justices Ashok Bhushan, Sanjay Kishan Kaul, MR. Shah and the Shah. The court expressed deep dissatisfaction with the media publishing the affidavit of the RBI before it was taken up by the Supreme Court. The complainant’s lawyer alleged that this was an attempt to make the matter controversial. All citizens of the country are in crisis He argued that banks are talking about profits.
Solicitor General Tushar Mehta said that the time allowed for joint action by the RBI and the government on the issue. The complainant also asked for time to respond to the RBI affidavit. The case was adjourned to June 12.
“The interest rate during the moratorium period on the orders of the Reserve Bank of India will increase in the months to come,” petitioner Gajendra Sharma said. After the announcement of the moratorium as a relief to those who have lost their lives in the closed, the RBI said that interest would be paid at that time. The petition requires that the order be contrary to the law of nature and hence the order should be avoided.
