SC asks RBI, Finance Ministry to convene meeting over EMI interests during moratorium

The Supreme Court on Friday asked the officials of the Finance Ministry and the Reserve Bank of India (RBI) to convene a joint meeting in the next 3 days over whether banks can charge interest on EMIs during the six month moratorium period or not. This comes in response to the affidavit filed by the RBI before the apex court asking it not to allow the petition seeking a waiver of interest for six month moratorium period on loan repayments claiming that it would incur a loss of approximately Rs 2 lakh crore.

SC's decision to convene a joint meeting comes shortly after the hearing on June 4 when the court had observed that "economic aspect should not be considered higher than the health of people" and 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: SC Seeks Finance Ministry's Reply On Waiver Of Interest On Loans During Moratorium Period

"The thing we are concerned about in these proceedings is only whether the interest that has been deferred for three months will be added to charges payable later and whether there will be interest on the interest," the court said. "If the RBI reply goes much beyond the query posed by us there will be a lot of opinions on it. Efforts will be made to sway it one way or another. Our query was limited. Whether the payment will impose interest on interest," the court added.

Read: RBI's Extension Of Moratorium On Repayment Of Loans Will Help Aviation Companies: Puri

Meanwhile, the State Bank of India (SBI) has also expressed its willingness to be an intervener in the proceedings on the part of banks suggesting that they are of the view that interest cannot be waived for six months EMI moratorium period. Solicitor General Tushar Mehta revealed that he has sought a meeting with the RBI regarding this. The bench headed by Justice Ashok Bhushan has slated the matter for further hearing on Wednesday.

Read: 'Economic Aspect Shouldn't Be Above Health Of People': SC To RBI On Interest In Moratorium

Read: RBI Extends Loan Moratorium By Another 3 Months, Till August 31; Slashes Repo Rate Again

(With ANI Inputs)