SC adjourned today on the moratorium interest waiver. Earlier on October 14, the court assembled in reference to file a petition for an interest waiver. Justice Ashok Bhushan, R Subhash Reddy, and Mr. Shah adjourned till November 2. The court has been debating on the decision whether or not, to support the decision in the favour of the borrowers or the lenders.
The SC had passed a verdict in reference to this matter, on November 15, but today on November 18th, the court received petitions to waiver the interest. If this happens then the difference between the compound and simple interest of six months shall be waived off. This could be great news for the borrowers but it could be bad news for the lenders.
The scheme applies to those who have taken loans up to 2 crores, in the month of February. This scheme was first passed by the SC in favor of the borrowers, however, ow the lenders are objecting to its decision. The fact is that the lender will lose 2 lakh crores if they are defeated by the borrowers. This verdict will impact the financial status of the banks, considering there could be a huge chunk of the evacuation of money.
The RBI first announced the verdict in the month of August 31, later it was extended to three months. The cashback was supposed to be provided as a relief, for Covid-19 to help the borrowers. There are chances, then these loans can be converted into NPAs (non-profit assets) However, on September 6 the SC appealed to the banks not to declare them as NPA (non performing assets), or to announce any such verdict. Considering this the banks have been waiting for the verdict.