The Supreme Court of India, has issued notices to the Centre and the Reserve Bank of India (RBI) over charging of interest on loans during the moratorium. This notice was issued as a response to the plea filed by Gajendra Sharma, stated a report.
In the wake of COVID-19 pandemic, RBI initially ordered a three-month moratorium on the payment of EMIs till May 31. But now this has been extended till August 31, 2020.
In the plea, the petitioner termed the decision to levy interest rate during the moratorium period as unconstitutional. It further stated during the lockdown, people’s incomes have already shrunk and they are in financial distress. So, such an act would impact the borrowers.
The plea was heard by a bench comprising Justice Ashok Bhushan, Justice Sanjay Kishan Kaul and Justice M R Shah.
Solicitor General, Tushar Mehta, who appeared on behalf of the Indian government said that RBI is yet to respond. The court has granted one-week’s time for the RBI to respond to the plea.
On April 30, the Supreme Court passed an order asking the RBI to ensure that the loan moratorium policy permitting exemption from paying EMIs and other loans during the COVID-19 lockdown period is implemented by the banks.
