Loan waiver not possible, says SC, declines to extend six-month moratorium

The Supreme Court on Monday refused to interfere with decision of Centre and the Reserve Bank of India to not extend loan moratorium period beyond Aug 31, 2020, saying it is policy decision, reported PTI.

According to the apex court, it cannot do judicial review of Centre’s financial policy decision unless it is malafide, arbitrary.

A bench headed by Justice Ashok Bhushan said it cannot interfere with the government’s decision to fix priorities for relief during the pandemic which has affected all across the country.

According to the Supreme court, no compound or penal interest shall be charged from borrowers for the six-month loan moratorium period, which was announced last year amid the COVID-19 pandemic. It added that the amount already charged shall be refunded, credited or adjusted.

The bench said this in its verdict on a batch of pleas filed by various trade associations, including from real estate and power sectors, seeking extension of the loan moratorium period and other reliefs in view of the pandemic.