Supreme Court pulls up Centre over loan interest issue

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Supreme Court of India (File Photo)
Supreme Court of India (File Photo)

New Delhi : The Supreme Court on Wednesday sought government's stand on waiving off interest on loan repayments during the moratorium. Centre claimed that waiving off interests would impact businesses and banks, to which SC said, "this happened because you locked down the entire nation."

The apex court has asked Centre to clear its stand on the issue by September 1.

The court said the centre had not clarified its stand even though it has "ample powers" under the Disaster Management Act to grant the waiver.

"There cannot be a solution which is one-size fits all," Solicitor General Tushar Mehta said.

"You cannot be interested only in business and not about sufferings of people," the Supreme Court said, noting that the matter had been hanging for a long time.

"The problem has been created by your (centre's) lockdown. This is also not the time to consider about the business. The plight of people has to be considered also. You have to tell us your stand on two things: disaster management act and if the interest on interest will be accounted for," said Justice Ashok Bhushan.

The RBI had earlier told the Supreme Court that it cannot grant waiver of interest on the loan payments during moratorium as it will put financial pressure on banks and also hamper stability of banks at risk.