The central government filed an affidavit in supreme court saying that ministry of finance has approved the various reliefs for Covid pandemic which included the policy of waiver of interest on interest, where that would be put into operation for borrowers of loans up to 2crores.
Borrowers included in eligibility criteria are of MSME loans, Education loan, consumer durable loans, credit and card dues, automobile loans, housing loans, personal to professional loans and consumptions loans up to 2crores. Centre also said that this decision has been taken keeping in mind the overall current economic scenario, impact on economy as well as borrowers, etc.
The decision was approved on October 21st, 2020 in a meeting which issued the scheme. In the said scheme difference between simple and compound interest of dates march 1st, 2020 and august 31st, 2020 will be credited to borrowers account.
Supreme Court bench consisting of Justice Ashok Bhushan, Justice R Shubhash Reddy and justive MR Shah said to centre that although it has welcomed its decision of relieving the small borrowers but it added that there was no reason to delay the implementation. Also said that it has always allowed centre to take as much time as it needed to come up with instruction but delay in not in interest of common man.
The affidavit filed was in response to series of pleas filed in the apex court, which was raising issues pertaining to RBI’s March 27 circular validity which allowed lending institutions to grant a moratorium on payment of installments which was due between March 1st, 2020 and August 31st, 2020 due to pandemic.