The Supreme Court on Thursday postponed the hearing on petitions regarding charging of ‘penal’ interest on deferred EMI payments by banks under the moratorium scheme during the COVID-19 pandemic.

Hearing the matter, a bench headed by Justice Ashok Bhushan has deferred the hearing in the case till September 28 and asked the Centre and Reserve Bank of India (RBI) to come up with a concrete decision. Earlier this month, the central government and RBI had informed the apex court that the moratorium on repayment of loans is extendable by up to two years. 

Appearing for the RBI and the government, Solicitor General Tushar Mehta contended before the court that the Centre is in the process of identifying the distressed sectors to decide what kind of relief could be provided, as per the impact of the hit they have taken.

Meanwhile, the top court’s order directing banks not to declare debt accounts as non-performing assets (NPAs) for two months will continue. In the last hearing, the court had ordered banks to refrain from declaring loan accounts that were not NPAs prior to August 31 as NPAs.

The RBI had on March 27 announced that all commercial banks including regional rural banks, cooperative banks, NBFCs (including housing finance companies) and lending institutions are being permitted to allow a moratorium of 3-month on payment of instalments in respect of all term loans outstanding as on March 1. The decision was announced by RBI Governor in view of coronavirus pandemic.

The moratorium was later extended till August 31 due to the financial stress caused by the COVID-19 pandemic.

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