The Supreme Court Unhappy With Government’s Compound Interest Waiver Plan

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Harsirat Kaur
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The Supreme Court spoke on the government’s decision to waive off the compound interest. Under the loan moratorium case, the new guidelines specify that irrespective of the moratorium amount, the borrower will get a waiver of interest. However, the Supreme Court specified that the government should re-think this decision. Other than this, the Supreme Cort also asked the union government to look into the concerns of real estate. The business of real estate has been on the downhill since the BJP’s reign. Furthermore, the top court also accused the government of not producing any prior “consequential orders or circulars.” This puts the RBI and the Union government at the question of accountability.

The Supreme Court unhappy with loan moratorium
Photo via News broadcast by Zee Business

The government fails to deal with many issues: The Supreme Court

The SC said that the decision to waive off the ‘interest on interest’ of up Rs. 2 crore, was unsatisfactory. The court emphasized that the affidavit released fails to deal with several issues of petitioners. It wants the government to file a new affidavit within a week. In the fresh affidavit, it wants the petitions heard, power producers, acknowledged, and steps to uplift real estate listed. Furthermore, the bank asked the Indian Banks’ Association to file its response to the Centre’s affidavit.

According to the affidavit, the Centre will waive off interest on MSME, housing, education, consumer durables, auto and personal loans up to Rs. 2 crores. The cost of the waiver will amount to Rs. 5,000 to 7,000 crore. However, the loans amounting to Rs. 6 lakh are not covered in this affidavit.

The Supreme Court and CREDAI want a new affidavit
CREDAI is Confederation of Real Estate Developers’ Association of India. It also wants proper provision in the new affidavit

The affidavit has baseless facts and figures

Other than the SC, CREDAI, a real estate organization also pointed out the fact the affidavit fails to consider the highlight features of the economy. It pointed out that the affidavit is formed without any facts and figures. Consequently, it the baseless affidavit which CREDAI does not agree with. It hopes that the Center will rethink its decision within a week. It did not get any relief provisions from the government and thus, asks the center to reframe the affidavit on the loan moratorium case.

The SC also ants more transparency over the provisions. It said, “The Centre and the RBI should make certain orders so that people know what benefit is extended.” The RBI and the center want to extend the moratorium up to two years, but the Supreme Court wants the entire affidavit reframed and reconsidered.

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