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| Ball in GoI’s court | | |
The COVID-19 pandemic has broken the back of country’s economy. People are struggling to make their ends meet since the day lockdown has been lifted. Another problem they are facing is that huge interest has got accumulated over the loans they had taken for one or other thing.
The loan moratorium period has ended and Easy Monthly Installments (EMIs) have returned. After country went into the lockdown mode to trim the spread of COVID-19 earlier this year, the Reserve Bank of India on March 27 had allowed a moratorium for all banks for three months on payment of all installments due between March 1 and May 31. The RBI had further allowed the banks to extend the moratorium till August 31, but had cautioned against the health of the bank sector. The RBI had made clear that moratorium will be applicable only on EMIs and the borrowers will have to pay the interest and it won’t be waived off.
A petition has been filed in the Supreme Court to seek the waiver of the interest component on loans during the past six months. The Apex Court has asked the Centre to file its reply on October 5.
Till date the Centre has not made it clear whether it would like to share the burden or not, but the RBI has made it known that banks cannot afford to bear any losses and it could have severe implications on the health of the financial institutions.
Now the ball is in the court of the Government of India (GoI). It has to decide whether it can come for the rescue of the people or not. The banks have dropped enough hints that these institutions won’t be able to do anything much and it’s the Centre which has to take a call. Response of the Centre to the petition filed in the Supreme Court to seek interest waiver has been luke warm. Till date the GoI has not given any clear cut answer on what could be its plan of action. During the recent hearing on the petition the Apex Court informed the Attorney General that there would be no further adjournments and the GoI has to file its response without any delay. Everyone is aware of the fact that entire interest amount can’t be waived off but the GoI should come forward at least to share some burden of the people who are grappling to clear their debts as during the past six months private sector has suffered immensely. |
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