The government informed the Supreme Court on Monday that complexities concerning the way forward following the expiry of the loan moratorium are under “active consideration” at the highest level.
The loan moratorium was in place during the pandemic lockdown.
Appearing before a Bench led by Justice Ashok Bhushan, Solicitor General Tushar Mehta said “the issues are under active consideration of the Government of India and only after decision is taken, an affidavit along with decision can be filed”.
Mr. Mehta said an affidavit explaining the government’s plans would be ready by October 1.
The court listed the case for October 5.
In the last hearing on September 10, the court had given into the persistent plea made by the government for two more weeks to brainstorm with the Reserve Bank of India and banks on crucial issues like sector-specific loan re-structuring and charging borrowers’ interest on interest for loans deferred during the moratorium period.
Mr. Mehta had even then said deliberations were on at the “highest level” in the government.
Individual borrowers and various sectors of commerce and industry, including traders, power and real estate, had urged the court to pass an interim order extending the loan moratorium, which expired on August 31.
They had said loan restructuring would not help as the banks had already started debiting interest on interest. Their credit ratings and asset value had dipped. This had seriously affected the confidence of account holders. The worst-hit were the individual borrowers, who had come out of the moratorium period only to find that they were supposed to pay interest on loan interest deferred during the moratorium.
But the court merely recorded the government submission that “expert committees” had been formed and they would file reports. The government had promised action.
“We are going into the problem in a holistic way,” Mr. Mehta had assured the court.
“You must have a complete and clear policy. Whatever is there, it should be very clear,” Justice M.R. Shah, on the Bench, had told him.
Mr. Mehta had said it would be a “self-contained policy”.