Loan EMI Moratorium: Loan holders will get big relief, the government can make a big decision on EMI

Loan In the Supreme Court in the case of the Moratorium Hearing Has been postponed. The Center has asked for more time to decide on the matter, after which the Supreme Court adjourned the hearing till October 5. The Center has sought 3 more days from the court on Monday. The government needs a little more time to put the details before the court. In this case, the central government can file an affidavit in the court by October 1. The RBI started the loan mortgage for 3 months in March, which was later extended to 3 months in August. But during the last hearing, the Supreme Court extended it to September 28 and now to October 5.

The panel was formed

In the affidavit of the government, the Center can make its point about abolishing interest on interest and extending the term of mortuary according to different sectors. The government may also decide on the recommendations of the Maharishi Committee. The Center said the existing rules of the Reserve Bank could extend the term of the mortuary for two years. The Center has constituted an expert panel under former Comptroller and Auditor General (CAG) Rajiv Maharshi to look into the issue of interest being taken by banks on deferred installments during deferral period due to COVID-19 epidemic.

Tushar Mehta, appearing for the government and the RBI on September 10, told the court that they could not waive the interest, but would reduce the payment pressure. Mehta said the banking sector is the backbone of the economy and no decision can be taken to weaken the economy.

However, during this time he also believed that all those who kept the problem were right. The situation in each sector needs to be taken into consideration, but also in the banking sector. Tushar Mehta said the purpose of the mortuary was not that interest would be waived.

Prohibition on declaring NPA to default account: As the loan mortgage has expired. In such a situation, people have started receiving messages, phone calls and e-mails from banks to pay EMIs. Because of this people are afraid to declare their bank loan account as Non Performing Asset (NPA). The apex court has said that the interim order will not continue to declare loan defaulters as NPAs till August 31 unless the government gives concrete plans.

What’s the problem: In fact, due to the lockdown, the RBI offered loan mortgages to customers who were unable to make timely payments due to low income. The facility remained open from March to August. This was an immediate relief as it was the only option to avoid EMI. But the shock to customers was that for the days they have deferred, banks will charge interest on EMIs.

In this case the court has asked on behalf of the petitioner why the consumers have to pay interest on interest if the government has provided this facility in view of the lockdown. Customers who defer EMI are now increasing their EMI. Compound interest is being taken from them. So what is the use of this feature.

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