Loan moratorium — Supreme Court gives government till Thursday to file affidavit, next hearing scheduled for October 5

• The Supreme Court has given the Indian government till Thursday, October 1, to file an affidavit on whether interest and accruing interest on moratorium loans should be charged.
• During the last hearing earlier this month, Justice Ashok Bhushan said the bench is inclined to pass an order that interest on interest should not be charged on moratorium loans.
• The matter will be heard again on October 5. Meanwhile, banks cannot designate accounts as non-performing until the matter is fully resolved.

The issue of accruing interest on loans that opted for the Reserve Bank of India’s (RBI) moratorium still hangs in the balance. The Supreme Court has given the government another three days, till Thursday October 1, to file their affidavit in consultation with the RBI and the Ministry of Finance.


"Little complex issue. Several economic issues are coming up," Solicitor General Tushar Mehta told the bench headed by Justice Ashok Bhushan.

For now, the matter has been adjourned and will commence again from Monday, October 5. Meanwhile, the interim orders issued by the Supreme Court stand — banks cannot declare accounts as non-performing assets (NPAs) until the matter is resolved.

“With respect to interest we have yet to take a decision but on the aspect of debiting interest on interest, we are inclined to pass an order that it may not be debited,” said Justice Ashok Bhushan during the previous hearing.

“Whatever you come with must be very clear,” Justice Shah told SG Mehta. According to Mehta, 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.

The bench informed Mehta that all decisions taken by the RBI, the Indian government and the state banks should be placed before the courts for consideration at the next hearing.

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