The Supreme Court of India has sought views from the Reserve Bank of India and the central government on the issue of “charging compound interest and credit rating/downgrading’’ during the six-month moratorium announced in the wake of the Covid-19 outbreak.
“On the next date of hearing, the specific instructions with regard to charging of compound interest and credit rating/downgrading during moratorium period shall be obtained, so that appropriate order be issued on the next date of hearing,” the top court’s order said. The court will next hear the case on Sept. 28.
The court has been hearing a batch of petitions seeking relief from interest levy on loan payments deferred during the moratorium period, which was initially for a period of three months till May 31, was later extended till Aug. 31. The moratorium terms set by the Reserve Bank of India require the borrower to pay deferred interest…or what the petitioners in this case are referring to as interest on interest for the period of the standstill. In previous hearings too the government had sought time to respond.