Bank stocks gain as Supreme Court defers verdict on loan moratorium case to October 5
- Banking stocks continue to rally as the Supreme Court defers its hearing on the waiving of interest on moratorium loans to next week.
- India's apex court granted the government another three days, till Thursday, to file its affidavit.
- Share price of large private sector banks like Axis Bank and IndusInd Bank are up by over 4%.
AdvertisementThe Supreme Court has given the Indian government till Thursday to file its affidavit on moratorium related issues. It will resume the hearing next week on October 5. The last time around the bench headed by Justice Ashok Bhushan indicated that it was ‘inclined’ to excuse the ‘interest on interest’.
At the time it gave the government another two weeks to file a detailed affidavit after Solicitor General Tushar Mehta asked for an extension. According to him, a committee has been formed at the ‘highest levels’ to decide on the issue of moratorium extension, interest during the moratorium, interest on interest, and other issues related to the moratorium period.
Banking stocks have been trading in the green and continue to gain after the Supreme Court deferred its verdict by another week. Strong rally seen in RBL Bank, Federal Bank, IndusInd Bank and Axis Bank.
Source: BSE. Share prices as of 11:10 am.
|Bank||% change in share price on Sep 28|
The Monetary Policy Committee (MPC) meeting has also been postponed with the government yet to appoint three new external members.
Meanwhile, Standard and Poor (S&P) painted a bleak outlook of India’s banking sector. According to the ratings agency, India’s banking system will be among the last in the world to recover from disruptions caused by the COVID-19 pandemic.
“For India, Mexico and South Africa, a recovery to pre-COVID-19 levels may not arrive until after 2023," the report said dated 23 September.
Source: JM Financial report dated 18 August
|Bank||% of loans under moratorium during phase 1||% of loans under moratorium during phase 2|
|Bank of Baroda||55%||21.%|
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