New Delhi, June 12: The Supreme Court on Friday gave the Reserve Bank of India and the Union Finance Ministry three-days time to decide on waiver of interest on deferred payments of installment for loans during the moratorium period, which was announced amid the coronavirus lockdown. The Supreme Court bench was of the opinion that banks should not charge interest payment on deferred payment.

Making the following observation, the Supreme Court Justice Ashok Bhushan said, as quoted by Bar and Bench, "Our concern is when you have deferred loan for three months then how can interest of these three months be added to the capital." While Justice Sanjay Kishan Kaul said, "RBI went beyond what was asked...We never said waive off full interest." Finance Ministry Says 'No New Schemes to be Initiated in 2020-21 Except for PM's Garib Kalyan Package and Announcements Made Under Atmanirbhar Bharat Policy'.

The bench also said, as NDTV quotes, "We are doing balancing. The only thing we are wanting is a wider measure. Our concern in these proceedings is only whether the interest that has been deferred for three months will be added to charges payable later and whether there will be interest on the interest." Following this, the three bench committee of Supreme Court -- also comprising Justice M R Shah -- asked the officials of RBI and Union Finance Ministry to hold a meeting. After making the observation, the court listed the matter for hearing on June 17.

Earlier on June 4, the Supreme Court sought Finance Ministry's reply on waiver of interest on loans during the moratorium period after the RBI said it would not be prudent to go for a 'forced waiver of interest' risking financial viability of the banks. The bench had then expressed it concern saying these are challenging times and it is a serious issue as on one hand moratorium is granted and on other hand interest is charged on loans.

(The above story first appeared on LatestLY on Jun 12, 2020 02:57 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).