The moratorium for repayment of loans can be extended for up to two years, says a circular by the Reserve Bank of India (RBI). The central government has clarified that credit card dues will also be eligible for the moratorium. The loans include all kinds of retail products, such as vehicle, home, personal loans, agricultural and crop loans. During the moratorium period, the customer does not have to pay EMIs and no penal interest is charged.
Tushar Mehta, the Solicitor General, told the Supreme Court on Tuesday that the center is also in the process of identifying the distressed sectors to vary benefits according to the impact of the hit they have taken. Mehta said the central government has also apprised the bench that it has filed an affidavit stating that the National Disaster Management Authority has taken cognizance of the issues and sent its ‘Views and Recommendations’ to the RBI.
The affidavit also says that ex post facto change in the terms and conditions of the offer of moratorium favouring those who availed of it over those who made the extra effort of repaying as per schedule would be grossly inequitable and patently unfair for those who did not avail of the benefits of moratorium initially or gave it up subsequently. The Solicitor General told the top court that representatives of the government, the RBI and banks should hold a meeting to come up with a proper solution.
The RBI had earlier informed the court that there could not be an interest waiver on term loans as the financial health and stability of banks would be at risk. The central bank, on May 22, had extended the moratorium on term loans till August 31, following the nationwide lockdown to stem the spread of COVID-19.