The Supreme Court has declined to interfere with decision of the Centre and the Reserve Bank of India to not extend loan moratorium period beyond August 31, 2020. The top court said that it is a policy decision.
An apex court bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah also said that no compound, penal interest be charged from borrowers during loan moratorium period and amount already charged shall be credited or adjusted.
The court said that it cannot do judicial review of Centre's financial policy decision unless it is malafide, arbitrary.
The bench said this in its verdict on a batch of pleas filed by various trade associations, including from real estate and power sectors, seeking extension of the loan moratorium period and other reliefs in view of the pandemic.
The Reserve Bank of India (RBI) had on March 27, 2020 announced a moratorium on loan instalments due between March 1 and May 31. The moratorium period was later extended by three months till August 31, 2020. The moratorium was intended to provide borrowers relief during the COVID-19 pandemic, enabling them to defer payments on EMIs.