Home News & Interview RBI Circular On 3-Month Moratorium On Loan Repayment Challenged In Supreme Court

RBI Circular On 3-Month Moratorium On Loan Repayment Challenged In Supreme Court

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A public interest litigation (PIL) was filed in the Supreme Court on Saturday seeking direction on setting aside the RBI’s March 27 circular on three-month moratorium on loan repayment between March 1 and May 31 amid COVID-19 pandemic.

The Reserve Bank of India (RBI) had issued the circular giving liberty to all banks and financial institution to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, subject to the borrower making such a request.

Moratorium is a legal authorisation to debtors to postpone payment.

The PIL was filed by activist and advocate Amit Sahni, and it seeks the Supreme Court’s directions to ensure that customers are not charged accrued interest for the moratorium period.

The petition was filed by advocate Amit Sahni and termed RBI Circular as eyewash as it provides that the interest shall be chargeable during the moratorium period and it makes no sense in paying additional interest along with the regular EMIs. He seeks the Supreme Court’s directions to ensure that no interest be charged during this moratorium period.

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