New Delhi: The Supreme Court Thursday told the Reserve Bank of India (RBI) that the economic aspect is not higher than health of the people. The apex court made the observation while hearing the interest waiver case.
Earlier, the central bank had in an affidavit said lenders will lose around Rs 2 lakh crore if interest is waived during the loan moratorium, which has been extended till August 31.
In response, the Supreme Court said, “RBI trying to sensationalize the issue by leaking to the media.”
Permitting a moratorium, but offering no relief through interest, is more detrimental, the apex court told the banking regulator.
The moratorium was initially granted on loans whose instalments are due between March 1 and May 31, which was later extended till the end of August.
The Supreme Court also sought the Finance Ministry’s reply on issue after the RBI said it would not be prudent to go for a “forced waiver of interest” risking financial viability of the banks.
The top court said there are two aspects under consideration in this matter – no interest payment on loans during the moratorium period and no interest to be charged on interest.
A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and MR Shah said that these are challenging times and it is a serious issue as on one hand moratorium is granted and on other hand interest is charged on loans.
The bench was hearing a plea, filed by Gajendra Sharma, in which he has sought a direction to declare the portion of RBI’s March 27 notification “as ultra vires to the extent it charges interest on the loan amount during the moratorium period, which create hardship to the petitioner being borrower and creates hindrance and obstruction in ‘right to life’ guaranteed by Article 21 of the Constitution of India”.
Sharma, a resident of Agra, has also sought a direction to the government and the RBI to provide relief in re-payment of loan by not charging interest during the moratorium period.
Solicitor General Tushar Mehta, appearing for the Centre, said that he would like to file the reply of Finance Ministry on the issue and sought time.
Senior advocate Rajeev Dutta, appearing for petitioner Gajendra Sharma, said that now the cat is out of the bag as RBI is saying profitability of the banks is primary.
He referred to the recent order of the apex court in the Air India matter on booking of middle seats on the non-scheduled flights to bring the stranded Indians from abroad. The court had said that economic interest is not higher than the health of people.
Dutta said that by the submission of the RBI, it means that only banks should earn profit while rest of the country goes down during the pandemic.
He said the petitioner would like to file a rejoinder to the reply filed by the RBI.
Mehta said he would consult the Finance Ministry and try to find out a solution to both the questions asked by the bench and file a response to them.
The top court asked the Solicitor General to file the response by June 12 and allowed the petitioner and other parties to file rejoinder by then.
