Tushar Mehta told the court that it is completely the responsibility of the banks to return the compound interest, which they have to fulfill, the borrowers need not come to the bank for this. He said that those who have filled EMI during the Moratorium should not be punished. Both those who take advantage of the moratorium or not, will benefit from it.
New Delhi: The Supreme Court has questioned the benefit of compound interest waiver in the loan moratorium scheme of the Reserve Bank to credit card holders. During the hearing of the loan morotorium case on Thursday, Justice MR Shah said that credit card users should not get a rebate in compound interest. Because they use credit cards to make purchases, they are not indebted.
Why Credit Card Interest Waiver: SC
During the hearing in the Supreme Court, Tushar Mehta, who is appearing for the Central Government, said that the credit card user will also get ‘X Gracia’. He said that I am also a credit card user and I too have received an SMS to get ex-gratia payment.
On this, the Supreme Court said that ‘credit card users use it to buy things, they have not taken any loan. They should not be given the benefit.
Banks will return money themselves, borrowers should not worry
Tushar Mehta told the court that it is completely the responsibility of the banks to return the compound interest, which they have to fulfill, the borrowers need not come to the bank for this. He said that those who have filled EMI during the Moratorium should not be punished. Both those who take advantage of the moratorium or not, will benefit from it.
The government had said the compound will pay the interest
Let us tell you that earlier on October 2, the Finance Ministry had filed an affidavit in the Supreme Court, in which it told them that the government will pay the compound interest to be charged on EMI of loans up to Rs 2 crore. From November 5, cashback of interest will come in the account of the borrowers. Banks have also started sending cashback money to the accounts of borrowers.
RBI is concerned about the balance sheet of banks
Reserve Bank of India had filed an affidavit in the Supreme Court stating that if banks waive interest, then it would have a bad effect on their balance sheets, which would also affect the bank’s depositors. RBI has said that the Supreme Court decided on September 4 that the decision to not pay EMI defaulters to the list of defaulters should be immediately abolished.
