The Supreme Court on Monday stated that it expects the Government to implement the decision of waiving the compound interest (interest on interest) on loans up to 2 crores which were accumulated during the 6-month moratorium and questioned the need to wait until November 15, 2020.
Diwali is in your hands: Supreme Court
The three-judge Bench of MR Shah, R Subhash Reddy headed by Ashok Bhushan has questioned the Govt with regard to the one month delay in announcing the scheme in waiving the compound interest that was accumulated during the loan moratorium period.
The Supreme stated that the scheme is to facilitate and help small and vulnerable borrowers who have faced a huge loss during the nation-wide lockdown.
“Their Diwali is in your hands,” said Justice MR Shah, who was part of the three-judge bench headed by Justice Ashok Bhushan.
The compound interest waiver scheme was introduced by the Finance Minister for eight different categories which include MSME (Micro Small and Medium Enterprises), education, housing, consumer durables, credit card, auto, personal, and consumption loans.
Further Justice Ashok Bhushan asked the Solicitor General Tushar Mehta who appeared on behalf of the Centre and RBI that why did they wait for a whole month until November 15 to bring this scheme into effect. He further questioned why the circulars are not issued on time.
Supreme Court sceptical about the “delay”; questions the Govt
When Justice M.R Shah and Ashok Bhushan questioned about the delay in announcing the scheme and why the Govt has not considered the common man’s plight, Mr. Mehta (who appeared on behalf of the Govt and RBI) said that announcing the scheme to waive compound interest was itself a proof that the govt is concerned about the common man. Mr. Mehta also added that the Govt would not gain anything by delaying it and that there are complexities and modalities involved which had to be worked on.
Mr. Mehta said that the government would not go back on its word since they have detailed the scheme in the affidavit.
The Bench seemed unsure and doubtful of the response following which justice shah again mentioned that if circulars were issued to the banks sooner then the Banks would have taken the necessary steps on time.
Senior Advocate Harish Salve who appeared on behalf of the Indian Banks Association assured the Bench that the scheme would be “worked out and done”. Further mentioned that the government has mentioned everything on an affidavit and a month’s time may be required to sort the large number of borrowers under the Rs. 2 crore category.
Senior Advocate P. Chidambaram who appeared on behalf the Shopping Centres Association of India said the court seemed to want a clear statement from the govt reacting to which justice Bhusan said the court wants “circulars” and not statements.
On request to sought “one line” from the Bench to assure the common man by senior Advocate Rajeev Dutta, the court refrained from passing any formal order instead scheduled a hearing on November 02, 2020, to evaluate the steps initiated by the government.