Following the financial difficulties faced by people due to the Covid-19 outbreak in the world and its effect on businesses, the Supreme Court of India had given the order to waive off the interest on loans and provide the people with a loan moratorium period. The moratorium period is a set period of days or months regulated by the RBI during which the people will not be liable to pay off their loans.
This probation period ended on 31st August. The people however have stated that as the losses have not been earned back by them, the loans still pose a difficulty to them and add to their existing financial burden. Thus, the court had a series of hearings on the various litigations filed regarding this issue and has finally decided that the moratorium period be extended to accommodate the needs of the people.
The ministry of finance filed an affidavit on the 25th of October which stated that the government had decided to allow the waiver on the interests for the moratorium period for loans up to ₹2 crores. Following up on this, the RBI has directed all the banks to credit back all the amount debited from the accounts of the borrowers. Furthermore, the RBI also filed an affidavit in which they asked all the financial as well as the non-financial institutions to credit back the amount which is reportedly around ₹2 crores which were accumulated during the pandemic lockdown and moratorium period. All this is being done under a government scheme allowing people to rebuild financially.
Another development in this has been that the Reserved Bank of India has asked the Supreme court that the accounts which were not declared as NPAs (Non-Performing Assets) before the moratorium period should not be considered/labeled as NPAs until further notice. NPAs or Non-Performing Assets are those loans which have been overdue to be paid off by 90 days or more. These are considered to be lost assets as they might not get re-payed till long after or ever.
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