The apex court today once again heard the case of interest waiver on loan under moratorium. In the previous hearing it was made clear that complete waiver is not being considered and the scope is only limited to granting waiver on interest charged on deferred interest payment of loan under moratorium.
After making some of the observations that the government can't leave everything to banks and should rather consider interfering, the honourable Supreme Court today deferred the consideration on interest waiver on interest charged for EMIs during the 6-months moratorium till August first week.
Also on the sidelines, the apex court said that it does not see merit in charging interest on interest on loans on which moratorium is availed. "Once you fix a moratorium, it should serve the desired purpose," said the apex court.
Bank depositors will be "severely hit" if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, said AIBDA or All India Bank Depositors' Association.
On the say, the banks put a premise that by that time they would be able to estimate the burden due to moratorium.
Further on the issue, centre and RBI will together deliberate while IBA will work if any new norms can be brought in.
Notably, if the waiver was granted, banks would have to bear a loss equivalent to 111% of their operating profits for the fiscal year.
Soon after the announcement, Bank Nifty which opened with losses of over 1% showed some resilience and was in the positive territory up 0.44% at around 12:11 pm.