The Supreme Court on Thursday extended the loan repayment moratorium to 28 September and instructed it not to declare any loan to be NPA (NPA-Non Performing Assets) due to non-payment of installments during this period (until 31 August). Hearing the Loan Moratorium Case, the Supreme Court said that the case is being deferred again and again. The matter is currently being deferred only once for a final hearing. During this time everyone should file their answer and come to court with a concrete plan in the case.
Center has asked for Two Weeks
During the hearing, the central government told the court the highest level was being considered. In relief, two or three rounds of meetings have been held in consultation with banks and other stakeholders and concerns are being investigated. The Center had asked for two weeks, on which the court asked what is going to happen in two weeks? You have to do something concrete in different areas. A three-judge bench of Justices Ashok Bhushan, R Subhash Reddy and Mr. Shah heard the case through a video conference, the court heard.
Banks and Customers will have to Accept these Instructions
Borrowers have received much relief from an apex court order not to declare their bank loan accounts as NPAs for the next two months. If a person’s loan is declared NPA, then his CIBIL rating gets spoiled. Due to this, they may face difficulties in taking a loan from any bank in the future.
At the same time, if a loan is found, then it may have to pay a higher interest rate than a person with a good CIBIL rating because now banks are also fixing interest rates on this basis. Now, after the order from the Supreme Court, banks will not declare an NPA even if they do not repay credit cards, home loans, vehicle loans or home loan installments until two months after the moratorium is over. However, penalties or interest can be charged by default.
Banks charging Interest on Interest
The Supreme Court has also sought a response from the Reserve Bank on charging interest on compound interest i.e. interest and penalty interest during the moratorium.
Arguments have been made in the Supreme Court on behalf of different sectors. The government will file its answer today.
The government can also refer to the Kamat report which came a few days ago in its reply. Kamat’s report states that loan restructuring of 26 sectors.
Moratorium can be Increased up to 2 Years!
Let us tell you that the government had said in the Supreme Court that the period of deferment, ie moratorium, can be extended by 2 years in repaying the loan.
If the Supreme Court accepts this proposal of the government, then the borrowers can get relief by repaying the loan for at least 2 years, but on what conditions it can be done, only the Supreme Court will decide.
The period of the Moratorium given by the government ended on 31 August. Since then, the Reserve Bank has said it is about a one-time restructuring of the loan.
Moratorium Percentage of these Banks
35.66 percent of Federal Bank, 28 percent of IDFC First, 24.9 percent of Bandhan Bank, 17.5 percent of ICICI bank, 13.7 percent of RBL Bank, 9.7 percent of Axis Bank, 9.65 percent of Kotak Mah, 9.6 percent of SBI and HDFC Bank 9 percent are in Moratorium.
Looking at the Moratorium of NBFCs, 40% of M&M Financial, 40% of Magma Fincorp, 16.6% of HDFC, 16% of LIC Housing and 15.5% of Bajaj Finance are in Moratorium.