'Economic aspect shouldn't be above health of people': SC to RBI on interest in moratorium

The Supreme Court on Thursday took up for hearing petitions challenging the Reserve Bank of India (RBI) Circulars of March 27 and May 22 allowing financial institutions to levy interest on loans during the 6-month repayment moratorium.

A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah expressed that there are two important issues that the Centre needs to take into consideration. One, that there should be no interest during the moratorium period and two, that there should be no interest on the interest to be levied.

READ | Supreme Court Notifies Centre On PIL Seeking Renaming Bombay HC To 'Maharashtra HC'

READ | Supreme Court Adjourns Plea Which Sought To Officially Rename 'India' As 'Bharat'

Justice Sanjay Kishan Kaul said that "these were not normal times" and that steps should be taken which will be in the financial interest of the citizens, while Justice Shah remarked that the accrual of interest during moratorium is 'detrimental.' 

Representing the RBI and the Centre, Solicitor General Tushar Mehta asked for more time to consult the Finance Ministry and the central bank together.

Justice Bhushan observed that "economic aspect should not be considered higher than the health of people". The court took objection to the counter-affidavit being published in the media before reaching the court. This, the petitioner's counsel Rajiv Dutta suggested, was a way of sensationalizing the issue. Net interest incomes account for 60-65% of the total revenue of a bank or financial institution.

The next date of hearing is June 12.

READ | BCI Deprecates 'sustained Attack' On Supreme Court By Some Senior Lawyers, Ex-judges

READ | Delhi HC Asks Centre, RBI To Consider Issues Faced By Scam-hit PMC Bank Depositors