SC to Centre: Consider not charging interest on interest during moratorium

The Supreme Court on Thursday asked the Centre to consider a plea for not charging interest on interest on deferred EMIs during the moratorium period and also not downgrade the credit/asset classification of the borrowers.

A bench headed by Justice Ashok Bhushan, R. Subhash Reddy and M.R. Shah asked the Centre, Reserve Bank of India and the banks to put their heads together within two weeks to decide on crucial issues -- sector-specific loan restructuring, charging of interest on interest, etc -- and then come up with a concrete decision.

Solicitor General Tushar Mehta, appearing for the Centre, submitted that an expert committee at the highest level has been set up to take decisions on the issue of moratorium extension, interest on interest during moratorium and other connected issues.

The top court said it is inclined to grant two weeks to the Centre to file an appropriate affidavit and it will consider different prayers made by petitioners on the next date.

The top court observed that its interim orders shall continue till the next date of hearing, where it had said that accounts not declared NPAs on August 31, shouldn`t be declared NPAs till further orders.

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The top court will take up the matter on September 28. The top court also directed the Centre, RBI and banks to place their decisions on the matter before it.