Plea in SC challenging RBI circular on 3-month moratorium on loan repayment


NEW DELHI: A petition was filed
in the Supreme Court
on Saturday seeking direction
on setting aside the
RBI‘s March 27
on three-month
repayment between March 1 and May 31 amid coronavirus pandemic.

The Reserve Bank of India (
RBI) had issued the
circular giving liberty to all banks and financial institution to allow a
moratorium of three months
on payment of instalments
in respect of all term loans outstanding as
on March 1, subject to the borrower making such a request.

It had said that
repayment schedule for such loans as also the residual tenor would be shifted across the board by three months after the
moratorium period.

Interest shall continue to accrue
on the outstanding portion of the term loans during the
moratorium period, the
RBI had said.

plea, filed
in the apex court by advocate Amit Sahni, has alleged that the
circular is an “eyewash as it provides that the interest shall be chargeable during the
moratorium period and it makes no sense
in paying additional interest along with the regular EMIs”.

It sought a direction to the Centre and the
RBI to clarify that any interest and accumulated interest
on outstanding amount shall not be charged from the borrower for the
moratorium period by any bank and financial institution.

It also sought directions to the government and the
RBI to “appropriately consider extending the
moratorium period for certain period so as to enable millions of persons, who may get unemployed due to COVID-19 health emergency for some time even after lockdown“.

“The purported relief proclaimed to have been given by the respondents (Centre and
RBI) vide
circular dated March 27, 2020 is incomplete as the same does not provide interest relaxation to citizens and those who avail
moratorium of three months shall have to pay interest
on the same subsequently,” the
plea said.

It said that COVID-19 has impacted each and every segment of society and its consequences would be far more serious even after lifting of the ongoing lockdown and
in such a situation, the government and the
RBI are “duty bound to support its citizen”.


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