He proposes a government. blocking banks declaring accounts as NPAs
The Supreme Court on Tuesday ordered banks and financial institutions to repay the combined interest, interest rate or interest rate collected on EMI loans during the suspension period from March 1 to August 31 last year.
“It has been pointed out that there will be no interest rate / combined interest / penalty interest at the time of suspension,” said Bench of Justices Ashok Bhushan, R. Subhash Reddy and Mr Shah in a 148-page decision.
The court ruled that the accumulated amount of interest / interest or interest rate during the six-month suspension on term loan EMIs should be provided as “debt / adjusted to the next installment of the loan account”.
Justice Shah, who wrote the decision, reasoned that extra interest on the spot or punishment is often collected by creditors. While the payment of installments had been suspended during the suspension period, what was the need to burden the borrowers, who are already struggling under the financial loss of the epidemic and closure, the court asked.
The ruling also marked the liberalization of banks and lenders as the court lifted its six-month ban on them declaring creditors’ accounts as non-performing assets (NPAs). In October last year, the high court suspended banks and lenders from declaring creditors’ accounts as NPAs.
The ruling concludes that the government’s interest rate-limiting program on loans that costs only ₹ 2 crore is unreasonable. The program, launched in October, was limited to MSME debt, education, housing, consumer sustainability, credit card, car categories, personal and consumer use within the ₹ 2 crore.
“There is no compelling reason to restrict interest-free exemption in respect of loans up to ₹ 2 crore only, and that, too, is limited to the specified categories (eight). There is no reason to stop such aid, ”noted Justice Shah.