The Supreme Court has questioned the benefits of compound interest waivers in the loan moratorium scheme for credit cardholders. During a hearing in the loan moratorium case on Thursday, Justice MR Shah said credit card users should not get a rebate on compound interest. Because they use credit cards to make purchases, they are not indebted.
No Interest Rebate on Credit Card
During the hearing in the Supreme Court, Tushar Mehta, who is appearing for the Central Government, said that the credit card user will also get ‘Ex-Gratia’. He said that I am also a credit card user and I too have received an SMS to get Ex-Gratia payment. On this, the Supreme Court said that ‘credit card users use their cards to buy things, they have not taken any loans. They should not be given the benefit.
Bank Responsibility to Return Compound Interest
Tushar Mehta told the court that it is completely the responsibility of the banks to return the compound interest, which they have to fulfill, the borrowers need not come to the bank for this. He said that those who have filled EMI during the Moratorium should not be punished. Both those who take the benefit of the moratorium or not will benefit from it.
The government has said that they will Pay the Compound Interest
Earlier on October 2, the Finance Ministry filed an affidavit in the Supreme Court, in which it is being told that the government would pay the compound interest to be charged on EMI of loans up to Rs 2 crore. From November 5, cashback on interest will come into the account of the borrowers. Banks have also started sending cashback money to the accounts of borrowers.
Bank’s Balance Sheet may be Affected due to Interest Waiver
Reserve Bank of India had filed an affidavit in the Supreme Court stating that if banks waive interest, then it would have a bad effect on their balance sheet, which would also affect the bank’s depositors. RBI has said that the Supreme Court decided on September 4 that the decision not to pay EMI defaulters to the defaulters’ list should be immediately abolished.