New Delhi: Asserting that courts should not interfere in fiscal policy, the Centre on Friday told the Supreme Court that it is impossible to give more relief to various sectors on loan moratorium interest amid the ongoing COVID-19 pandemic.
“Any further relief, besides waiving of compound interest for loans up to Rs 2 crores, is detrimental to the national economy and banking sector”, the government reportedly said in its latest affidavit.
This comes days after the government told the apex court that it has decided to ‘waive interest’ on loans of up to Rs 2 crore during the six-month moratorium period.
The Centre in its affidavit submitted to the court on October 2 stated that it has decided to maintain its tradition of handholding small borrowers and bear the burden of waiving of interest for the most “vulnerable category of borrowers”.
The interest waiver will apply to retail and MSME (Micro, Small and Medium Enterprises) borrowers. Besides, loans taken by individuals for educational, housing, consumer goods and auto loans and for credit card dues can also avail the benefit. Besides, those who have cleared their loan dues during the moratorium period will also get the benefit.
Notably, the RBI had announced a moratorium on repayment of debt for six months beginning March 1, 2020, to help businesses and individuals tide over the financial problems on account of disruption in normal business activities. The six-month moratorium period ended on August 31.
Earlier last month, the Centre had informed the SC that the moratorium on repayment of loans can be extended by two years in line with the Reserve Bank of India’s (RBI) circular.