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Mumbai, Jun 17 () Interest rate waivers for bank loans during moratorium will harm the depositors, the All India Bank Depositors' Association (AIBDA) has said adding that interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Bank depositors will be "severely hit" if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, it said. It further added that historically, the sovereign covered the loan interest waivers, but in the current situation, a shortfall in revenues both at the Centre and state level will not permit the same. Meanwhile, on June 12, the Supreme Court had asked the Centre and the Reserve Bank of India (RBI) to hold a meeting within three days to decide on waiver of interest on interest for deferred payments of instalments for loans during the moratorium period announced in wake of the coronavirus-induced lockdown. "Our query is very limited on whether there can be waiver of interest on interest," a bench of Justices Ashok Bhushan, S K Kaul and M R Shah had said, adding it will take a balanced view of the matter. The AIBDA said media reports on the Supreme Court observations have been "extremely unnerving" and added that the same prompted it to make the depositors' stance known. "We are greatly perturbed about the likely ramifications of the loan interest waiver on the banking sector, and on the prudential financial discipline of the borrowers," the association's secretary Amitha Sehgal said in the statement. The Supreme Court should dispose-off the petition, it recommended, adding that opting for interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Credit demand has also gone down and will revive as the lockdown eases, it said, adding that the depositors' money is unlikely to be used for it as the low cost funds made available by the RBI will be deployed. As the depositors' money is unlikely to be used, "there is a case for protection of depositors' interest by way of freezing the deposit rates at the pre-COVID-19 level," it said, adding it is yet to hear from the RBI on this. AA DRR DRR

Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA

The <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword> Tuesday deferred to November 5 the hearing on a batch of pleas relating to charging of interest on interest by banks on EMIs which were not paid by the borrowers who availed of the RBI <keyword id="6840678" type="UNKNOWN" weightage="20" keywordseo="loan-moratorium">loan moratorium</keyword> scheme in view of the COVID-19 pandemic. The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> and the Finance Ministry have already filed separate additional affidavits in the apex court saying that the banks, financial and non-banking financial institutions will credit into the accounts of eligible borrowers by November 5 the difference between compound and simple interest collected on loans of up to Rs 2 crore during the <keyword id="117489" type="PERSON" weightage="20" keywordseo="moratorium">moratorium</keyword> scheme period. A bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah was requested by Solicitor General Tushar Mehta that the hearing in the loan moratorium case be deferred as he would be busy arguing on behalf of the Centre in other matter relating to the Central Vista project. "These moratorium matters were listed yesterday but they came up today. I am requesting for an adjournment considering I have a case (Central Vista) where I will be arguing" the law officer said. A letter seeking deferment of the hearing in the case was also circulated by advocate-on-record Anil Katiyar for the Centre to the parties and the bench. The top court acceded to the request and adjourned the hearing on pleas including the one filed by Gajendra Sharma on November 5. The pleas pertained to charging of interest on interest by banks on EMIs which have not been paid by borrowers after availing the loan moratorium scheme of RBI during March 1 to August 31. Earlier, the RBI had filed the affidavit saying that it has asked all banks, financial and non-banking financial institutions to take "necessary actions" to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme. Prior to this, the central government had told the apex court that lenders have been asked to credit into the accounts of eligible borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the RBI's loan moratorium scheme by November 5. The government had said that the ministry has issued a scheme as per which lending institutions would credit this amount in the accounts of borrowers for the 6-month loan moratorium period which was announced following the COVID-19 pandemic situation. On October 14, the apex court had observed that the Centre should implement "as soon as possible" the interest waiver on loans of up to Rs 2 crore under the RBI's moratorium scheme and had said that the common man's Diwali is in the government's hands. The RBI had on March 27 issued the circular which allowed lending institutions to grant a moratorium on payment of instalments of term loans falling due between March 1, 2020, and May 31,2020, due to the pandemic. Later, the moratorium was extended till August 31 this year. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/prajakta-koli-aka-mostlysane-advice-for-content-creators-on-the-fine-line-between-brand-collaborations-and-staying-honest-on-social-media/articleshow/79013162.cms">Prajakta Koli aka MostlySane’s advice for content creators on the fine line between brand collaborations and staying honest on social media</a> <a href="https://www.businessinsider.in/business/ecommerce/news/flipkart-acquires-gaming-startup-mech-mocha-as-it-looks-to-tap-the-social-gaming-space-for-more-consumers/articleshow/79014466.cms">Flipkart acquires gaming startup Mech Mocha as it looks to tap the social gaming space for more consumers</a> <a href="https://www.businessinsider.in/india/news/covid-19-vaccine-updates-pfizer-moderna-to-roll-out-covid-19-vaccine-by-december/articleshow/78924143.cms">COVID-19 vaccine tracker: German CureVac shows an immune response, Aspen Pharmacare and J&amp;J sign pact to make vaccine in South Africa</a>

Supreme Court verdict on loan moratorium case deferred to November 5

New Delhi, Jun 12 () The Supreme Court on Friday asked the Finance Ministry and the Reserve Bank of India to hold a meeting within three days to decide on waiver of interest on interest for deferred payments of instalments for loans during the moratorium period announced in wake of the coronavirus-induced lockdown. The court was hearing a plea filed by a Agra resident on the issue. A bench of Justices Ashok Bhushan, S K Kaul and M R Shah said the question is not of waiver of complete interest for entire moratorium period but it is limited only to interest charged on interest by banks. It posted the matter for further hearing next week. During the hearing, the bench said that it is trying to take a balanced view of the matter, and only wants that wider measures should be adopted. Solicitor General Tushar Mehta, appearing for the Centre, said that he had sought a meeting with the RBI. The bench said that if the RBI reply "goes much beyond the query posed by us there will be a lot of opinions on it". "Our query is very limited on whether there can be waiver of interest on interest," it said. It asked the Centre to file an affidavit after holding the meeting with the RBI on the decision taken. The bench was hearing a plea filed by Gajendra Sharma, in which he has sought a direction to declare the portion of the 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 has also sought a direction to the government and the Reserve Bank of India (RBI) to provide relief in repayment of loan by not charging interest during the moratorium period. On June 4, the top court had sought the Finance Ministry's reply on waiver of interest on loans during the moratorium period 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 had 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. It had said that these are challenging times and it is a serious issue as on the one hand, moratorium is granted and on other hand, interest is charged on loans. On May 26, the top court had asked the Centre and the RBI to respond to the plea challenging levy of interest on loans during the moratorium period. The RBI in its reply has told the top court that it is taking all possible measures to provide relief with regard to debt repayments on account of the fallout of COVID-19 but it does not consider it prudent to go for a "forced waiver of interest, risking the financial viability of the banks it is mandated to regulate, and putting the interests of the depositors in jeopardy". In its reply, to the plea the RBI said that regulatory package is, in its essence, in the nature of a moratorium/deferment and "cannot be construed to be a waiver". "While the Reserve Bank is taking all possible measures to provide relief to the real sector with regard to debt repayments on account of the fallout of COVID-19, it does not consider it prudent or appropriate to go for a forced waiver of interest, risking the financial viability of banks it is mandated to regulate, and putting the interests of the depositors in jeopardy," the Reserve Bank had said in its affidavit. It had said the mandate of the Reserve Bank as far as regulation of banks is concerned draws upon the considerations of protection of depositors' interest and maintenance of financial stability, which also require that the banks remain financially sound and profitable. The RBI had said that the March 27 circular announcing moratorium was later modified on April 17 and May 23 by which the moratorium period was extended by another three months that is from June 1 to August 31, 2020 on payment of all installments in respect of term loans (including agricultural term loans, retail and crop loans). "It is submitted that regulatory dispensations permitted by the Reserve Bank of India vide the aforesaid circulars dated March 27, 2020 which subsequently stood modified on April 17, 2020 and May 23, 2020 were with the objective of mitigating the burden of debt servicing brought about by disruptions on account of COVID-19 pandemic and to ensure the continuity of viable businesses. Therefore, the regulatory package is, in its essence, in the nature of a moratorium/deferment and cannot be construed to be a waiver," it had said. The RBI had said that in order to ameliorate difficulties faced by borrowers in repaying accumulated interest for the moratorium period, on May 23 it had announced that in respect of working capital facilities, lending institutions may, at their discretion, convert the accumulated interest for the deferment period up to August 31, 2020, into a funded interest term loan (FITL) which shall be repayable not later than March 31, 2021. MNL ABA SJK MNL DV DV

Waiver of interest charged during moratorium: SC asks Centre, RBI to hold meet in three days

New Delhi, Apr 4 () Tourism stakeholders have raised concerns that the government failed to address the survival crisis being faced by the industry in the wake of the coronavirus pandemic and said immediate steps need to be taken to help out the sector. This was conveyed in a video conference meeting with senior officers of the Ministry of Tourism on Friday. The Federation of Associations in Indian Tourism &amp; Hospitality (FAITH), Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), PHD Chamber of Commerce and Industry (PHDCCI) and Internet and Mobile Association of India (IMAI) participated in the meeting. They demanded that the RBI's three-month moratorium on loan repayments amid disruptions caused by the coronavirus outbreak be extended to 12 months and that the interest accrual should stop during that period. The tourism bodies also suggested that some loans for the industry (tourism) should be restructured. "Secretary-Tourism updated us that across all the key ministries of the government, it has been widely acknowledged and accepted that Indian tourism industry will be one of the worst hit from this pandemic. He mentioned that this is of very high concern to the government and this acceptance, itself, within the government is a big move forward for us. We hope that our relief measures will be prioritised accordingly soon," Ashish Gupta of FAITH who attended the meeting said. In a statement, the tourism ministry said that the industry put forth a number of ideas and suggestions for tiding over the crisis created by COVID-19 in the sector of tourism and hospitality. "The ministry on its part shared the concerns and also assured the associations that the government was very much with them in this grim hour and that it would work towards the suggestions put forth. A lot of thrust on promoting domestic tourism was a common takeaway," it said. "The ministry is using its social media handles to create awareness on the need to stay at home and be safe in the period of lockdown, and prepare to travel once the world opens up," the statement said. It said that in the meantime, the course modules of the Institutes of Hotel Management under the ministry are being held online, and the faculty and students are using technology to remain abreast with their course curriculum. ASG SRY

Tourism bodies demand extension of RBI moratorium, interest waiver to tide over COVID-19 crisis

New Delhi, Apr 1 () Three-month moratorium on EMI payments offered by banks is unlikely to bring much relief to borrowers hit by COVID-19 lockdowns as they will have to bear the extra cost of interest charged by lenders and a longer repayment period, according to experts. Experts feel that the three-month moratorium on repayment on loans to help people fight the impact of coronavirus seems to be benefiting banks rather than borrowers as they will have to pay accumulated interest through increased number of EMIs. It is an expensive proposition for any borrower to opt for three-month suspension as announced by the RBI under the relief measures to mitigate the hardship of those hit by the outbreak of COVID-19 pandemic. Last Friday, the RBI had announced that all term loans, including retail and crop loans and working capital payments, will be covered by the three-month moratorium. Banks will now have discretion in deciding the limits on working capital, with the RBI saying that no payment miss should be considered a default and reported to credit information companies. It seems like a double whammy for borrowers as on one side income has been hit due to COVID-19 pandemic and on the other hand, there is a threat of increased tenure if they opt for RBI relief measure. SBI managing director C S Setty said it has two components- people who have term loans and the business units that have working capital loans. "In the case of term loans, the RBI has clarified that the instalments, which includes principal as well as interest, where the instalments are falling due between March 1 and May 31, will be deferred for three months. "So, in a term loan where the instalments are deferred and interest is also deferred means it is to be back ended. No point in again loading the term loan interest right away after three months, which customers would find it difficult," he said. So, what SBI is doing is that these three monthly installments that are falling in this period, will be back ended at the end of the repayment period, he said, adding, any deferment of interest over such long period, if it is there, will entail additional costs because it is not interest waiver, it is interest deferment. The accrued interest will be collected by the lender in the form of additional EMIs from those borrowers who opt for three months moratorium. "We have been telling our customers through social media that if you have the ability and cash flow to pay, it makes sense to pay this amount to avoid the cost. But, the important thing is if you want additional cash flow, you avail this facility, and it costs you," he added. In case of working capital, he said, three months interest will not be applied to the account but it will be applied immediately after the three months. In a note to customers, SBI said, "Interest shall continue to accrue on the outstanding portion of the term loan during the moratorium period". Explaining the financial burden with the help of an example, SBI said for a home loan of Rs 30 lakh with a remaining maturity of 15 years, the net additional interest would be approx Rs 2.34 lakh equal to eight EMIs for those borrowers who opt for the moratorium. "For an auto loan of Rs 6 lakh with a remaining maturity of 54 months the additional interest payable would be Rs 19,000 approx equal to additional 1.5 EMIs". Releasing frequently asked questions (FAQ) Indian Banks'' Association (IBA) said that borrowers whose incomes have not been impacted should pay their EMIs in time. "You may take the benefits under this (RBI) package if there is a disruption in your cash flows or there is loss of income. However, you must take into account that the interest on the loans, though not mandatorily payable immediately and gets postponed by 3 months, continues to accrue on your account and results in higher cost," IBA, an association of banks, said. To give you a perspective, it said, "suppose your loan outstanding is Rs 1,00,000 and you are charged 12 per cent rate of interest on your loan, then every month you are liable to pay Rs 1,000 as interest. In case you opt not to service the interest every month, you are liable to pay interest at 12 per cent per annum, and accordingly you will pay Rs 3,030.10 at the end of 3rd month". Similarly, in case the interest rate is 10 per cent, you are required to pay Rs 833 per month, or Rs 2,521 after three months, it added. Concerning credit card dues, IBA said, there is a requirement to pay a minimum amount and if it is not paid the same gets reported to Credit Bureaus but in view of the RBI circular, the overdue in the credit card account do not get reported to the credit bureaus for a period of three months. "However, interest will be charged by the credit card issuer on unpaid amount. You should check from your card provider to arrive at interest payable. Although no penal interest will be charged during this period, you must remember that the interest rate on credit card dues are normally much higher compared to normal bank credit and you should take a decision accordingly," it said. PNB Housing Finance said that there will be an increase in balance tenure by three months and a possible rise in EMIs for those customers opting for the moratorium. DP HV CS ANZ MRMR

EMI moratorium: Borrowers unlikely to get significant gains; banks to charge interest later

New Delhi, Jun 3 () The Reserve Bank of India has told the Supreme Court that it is taking all possible measures to provide relief with regard to debt repayments on account of the fallout of Covid-19 but it does not consider it prudent to go for a "forced waiver of interest, risking the financial viability of the banks it is mandated to regulate, and putting the interests of the depositors in jeopardy". In its reply, to a plea challenging levy of interest on loans during the moratorium period which has been extended by another three months till August 31 due to the coronavirus pandemic, the RBI said that regulatory package is, in its essence, in the nature of a moratorium/deferment and "cannot be construed to be a waiver". "While the Reserve Bank is taking all possible measures to provide relief to the real sector with regard to debt repayments on account of the fallout of Covid-19, it does not consider it prudent or appropriate to go for a forced waiver of interest, risking the financial viability of the banks it is mandated to regulate, and putting the interests of the depositors in jeopardy," the Reserve Bank said in its affidavit. It said that the mandate of the Reserve Bank as far as regulation of banks is concerned draws upon the considerations of protection of depositors' interest and maintenance of financial stability, which also require that the banks remain financially sound and profitable. "That it is submitted that the Reserve Bank of India being the regulator of the banking sector, took cognizance of the probable stress caused in the financial situation and conditions of the citizens of this country - the consequent stress upon the economy due to outbreak of Covid-19 pandemic - and issued a Statement on Developmental and Regulatory Policies dated March 27, 2020…," it said, adding that legislature has empowered it to determine the banking policies for the banking companies. On May 26, the top court had asked the Centre and the RBI to respond to a plea challenging levy of interest on loans during the moratorium period. The plea, filed by Agra resident Gajendra Sharma, 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". It 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. The RBI said that the March 27 circular announcing moratorium was later modified on April 17 and May 23 by which the moratorium period was extended by another three months that is from June 1 to August 31, 2020 on payment of all instalments in respect of term loans (including agricultural term loans, retail and crop loans). "It is submitted that the regulatory dispensations permitted by the Reserve Bank of India vide the aforesaid circulars dated March 27, 2020 which subsequently stood modified on April 17, 2020 and May 23, 2020 were with the objective of mitigating the burden of debt servicing brought about by disruptions on account of Covid-19 pandemic and to ensure the continuity of viable businesses. Therefore, the regulatory package is, in its essence, in the nature of a moratorium/deferment and cannot be construed to be a waiver," it said. The RBI said that in order to ameliorate the difficulties faced by borrowers in repaying the accumulated interest for the moratorium period, on May 23 it had announced that in respect of working capital facilities, lending institutions may, at their discretion, convert the accumulated interest for the deferment period up to August 31, 2020, into a funded interest term loan (FITL) which shall be repayable not later than March 31, 2021. "Further, in respect of term loans, it has been provided that the repayment schedule for such loans, including interest as well as principal, as also the residual tenor, will be shifted across the board," it said. It said that lending institutions are required to provide the said reliefs to all eligible borrowers and disclosed in public domain. Since the customer profile, organizational structure and spread of each lending institution is widely different from others, each lending institution is best placed to assess the requirements of its customers. "Therefore, the discretion regarding deciding the eligibility of customers and manner in which the customers are on-boarded for availing this benefit, including the manner of recovery of the interest accrued during the moratorium period, has been left to the lending institutions concerned," the banking regulator said. It added that the banks are commercial entities that intermediate between the depositors and the borrowers and are expected to run on viable commercial considerations. "Moreover, the banks being custodians of depositors' money, their actions need to be guided primarily by the protection of depositors' interests. Any borrowing arrangement is a commercial contract between the lender and the borrower and the interest rates reflect the same", the RBI said. "It is further submitted that the interest on advances forms an important source of income for banks and after meeting the cost of funds, the banks also need to sustain reasonable interest margins for viable operations," the RBI said. MNL ABA SJK MNL RKS RKS

Not prudent to go for forced waiver of interest, risking financial viability of banks: RBI to SC

<ul><li>The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword>’s (RBI) <keyword id="9861168" type="UNKNOWN" weightage="20" keywordseo="six-month-moratorium">six-month moratorium</keyword> came to an end on August 31, and payments are set to come due, starting today.</li><li>The Supreme Court is yet to announce its verdict on whether the interest accrued during that time will be waived, leaving many borrowers wondering what they should do. </li><li>Those who aren’t in a position to make payments, waiver or not, have the option to go for a one-time restructuring of loans.</li></ul>The Reserve Bank of India’s (RBI) pause on repayment of interest on loans for the past six months came to an end yesterday, August 31. Even though the government is yet to take a stand on whether or not the interest accrued during the moratorium period will be waived off, the payments for borrowers are going to start coming due from today. <div type="Article" hostid="261" msid="77758597" title="Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived" mstype="2" mssubtype="0"></div> As a borrower, you fit into one of three categories: <ol><li>Someone who didn’t avail the moratorium</li><li>Someone who availed the moratorium and is still facing financial difficulties</li><li>Someone who availed the moratorium but only for the sake of keeping liquidity on hand</li></ol>Someone who didn’t avail the moratorium If you’re a borrower that did not avail the moratorium facility offered by the RBI over the last six months, nothing changes. Your monthly payments continue as is, and there is no change in your overall loan payments scheme. Someone who availed the moratorium but can afford to pay Not everyone who availed the moratorium was facing a financial crisis. Someone did it to ensure that there was some extra cash on hand in case things took a turn for the worse. Even with the matter of interest waiver pending with the Supreme Court, banks are likely to recommend a one-time payment rather than letting interest accrue further. According to the RBI, an interest waiver could lead to a loss of ₹2 lakh crore for banks in India. “If you have taken a moratorium, the bank will suggest depositing as much amount as you can,” a bank manager at one of India’s leading public sector banks told Business Insider. According to them, even if the Supreme Court decides to waive interest, the amount will go towards advance loan paid. Someone who availed the moratorium and is still facing financial difficulties Not every business has been impacted equally during the coronavirus lockdown — some have taken a bigger hit than others. Take the tourism industry as an example. India’s gross domestic product (<a href="https://www.businessinsider.in/policy/economy/news/indian-economy-contracts-23-9-in-the-april-june-quarter/articleshow/77854401.cms">GDP</a>) data released yesterday shows how the trade, hotels, transport &amp; communications showed the biggest dip in real gross value addition (GVA). So, if you’re one of the many who is still not in a position to make payments, you have the option to approach your bank to restructure your loan. This could mean smaller payments over a longer period, an extension of the moratorium, or relaxation of interest rates. “We look at restructuring of loans as a last resort. It’s only for customers you really need it, and there are no other options left to explore,” said the source. <div type="Article" hostid="261" msid="77391894" title="If you have a bank loan that you are unable to pay, restructuring is on its way" mstype="2" mssubtype="0"></div> All types of loans, whether its a personal loan or a corporate loan, can apply for restructuring provided they meet the RBI's eligibility requirements — like you should not have defaulted on your loan payments as of 1 March 2020 or within 30 days of that day. The outstanding amount of debt at that point of time will be considered for restructuring. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/loan-moratorium-still-ends-on-aug-31-while-supreme-court-gives-the-government-another-week-to-clarify-if-accrued-interest-should-be-waived/articleshow/77758597.cms">Loan moratorium still ends on Aug 31 while Supreme Court gives the government another week to clarify if accrued interest should be waived</a> <a href="https://www.businessinsider.in/tech/enterprise/news/rise-in-work-from-anywhere-will-lead-to-more-outsourcing-thats-an-opportunity-for-tcs-infosys-and-hcl-tech/articleshow/77864248.cms">Rise in 'work from anywhere' will lead to more outsourcing — that's an opportunity for TCS, Infosys and HCL Tech</a> <a href="https://www.businessinsider.in/stock-market/markets/news/dollar-index-is-at-a-two-year-low-and-heres-how-much-it-may-hurt-tcs-infosys-hcl-tech-and-others-if-it-stays-weak/articleshow/77843868.cms">Dollar Index is at a two-year low⁠ and here’s how much it may hurt TCS, Infosys, HCL Tech and others if it stays weak</a>

Loan repayments will become due starting today — here are the options that borrowers have

<ul><li>State Bank of India (SBI), Axis Bank, HDFC Bank and other banking stocks are treading on the side of caution ahead of the <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword>’s hearing on moratoriums loans today. </li><li>ICICI Bank is the worst hit with its share price dipping by more than 2%.</li><li>The Supreme Court is yet to pass a verdict on whether the moratorium should be extended and if interest on interest should be charged. </li></ul>The Supreme Court is set to resume its hearing on waiving interest on loans that availed moratorium during the coronavirus pandemic today. The last time around, the bench headed by Justice Ashok Bhushan indicated that it was <a href="https://www.businessinsider.in/finance/banks/news/supreme-court-inclined-to-excuse-moratorium-interest-on-interest-as-it-gives-the-government-another-two-weeks-to-file-detailed-affidavit/articleshow/78033878.cms">‘inclined’ to excuse the ‘interest on interest.’</a> However, since then, the hearing has been postponed twice to give the government, <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) and other stakeholders more time to file their response. Banking stocks are cautious in trade ahead of the hearing, most of them in the red. <keyword id="4774972" type="PERSON" weightage="20" keywordseo="icici-bank-share-price">ICICI Bank share price</keyword> is down by as much as 2%, while others remain largely unchanged. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% change in share price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-2.33% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">State Bank of India (SBI) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.06% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IndusInd Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.03% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-0.42% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-4.0% </td></tr></tbody></table>Source: Share price as of 10:10am on BSE According to Solicitor General Tushar Mehta, a committee had been formed at the ‘highest levels’ to decide on moratorium extension, interest during the moratorium, interest on interest, and other issues related to the moratorium period. The RBI’s stance on loan moratorium In its affidavit, the RBI told the Supreme Court that extending the moratorium beyond six months will impact overall credit discipline and have a ‘debilitating impact’ on the credit creation process. On the issue of compound interest, the RBI asserted that waiver of the same would result in ‘significant economic costs’ for banks to absorb. The larger ripple effect may lead to implications for borrowers and undermine broader financial stability. Central government’s take on loan moratorium The central government asserted that it would waive compound interest (interest on interest) during the moratorium period for MSMEs and personal loans up to ₹2 crore in its affidavit filed ahead of the last hearing. However, Senior Advocate C. Aryama Sundaram argued that the real estate sector is completely left out of the scope. The bench was also not pleased, highlighting that the central government’s affidavit did not provide the necessary details regarding the questions asked by the court earlier. 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You Searched For "moratorium interest waiver" and got 8 results

Interest rate waivers for bank loans during moratorium will harm depositors: AIBDA

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Supreme Court verdict on loan moratorium case deferred to November 5

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Waiver of interest charged during moratorium: SC asks Centre, RBI to hold meet in three days

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Tourism bodies demand extension of RBI moratorium, interest waiver to tide over COVID-19 crisis

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EMI moratorium: Borrowers unlikely to get significant gains; banks to charge interest later

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Not prudent to go for forced waiver of interest, risking financial viability of banks: RBI to SC

PTI

Loan repayments will become due starting today — here are the options that borrowers have

Prabhjote Gill

SBI, HDFC Bank, Axis Bank and other bank stocks tread caution as they wait with bated breath for Supreme Court verdict on moratorium

Prabhjote Gill

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