Supreme Court has requested the Reserve Bank of India (RBI) to check and verify if the March 27 circular, directing for a moratorium on loan installments, was being implemented in “letter and spirit”.
On March 27, the central bank, as a part of a slew of measures to combat the financial implications of the lockdown, had allowed financial institutions to grant a moratorium on installments that become due between Mar 1 and May 31.
The Supreme Court was hearing as many as four petitions, which questioned the implementation of the scheme on the ground.
One of the concerns raised in the petitions was that despite the RBI allowing for financial institutions to provide the relief, many on the ground were refusing the facility to the customers. One of the petitions also questioned the application of interest during the lockdown period. The petition had argued that if interest continues to be charged for the duration of the moratorium, it would defeat the purpose of the scheme.
The Supreme Court, however, clarified that it did not see it as a fit case for interfering with the March 27 moratorium circular.
Nonetheless, hearing the arguments, the SC observed that, as per reports, it appeared that benefits extended by the RBI were not being passed on to customers. SC noted that proper guidelines for enforcement of the circular should be in place.
The apex court has now pushed the RBI to examine if the policy is being implemented, as intended, on the ground.