Is moratorium interest waiver Supreme Court?

The Supreme Court last month directed that no compound or penal interest shall be charged from borrowers for the six-month loan moratorium period, which was announced last year amid the COVID-19 pandemic, and the amount already charged shall be refunded, credited or adjusted.

Is interest on interest waived?

The Supreme Court of India today ruled in favour of waiving compound interest, ie, interest on interest during the six-month moratorium announced by the Reserve Bank of India last year.

Will Supreme Court Extends moratorium?

The Supreme Court on Tuesday declined to extend the six-month loan repayment moratorium, saying the power to take such a decision lay with the government and Reserve Bank of India (RBI), in a ruling that allows banks to start recognizing loan losses.

Will the moratorium be extended beyond August 2020?

In its awaited ruling, the SC denied to interfere with the Centre’s and Reserve Bank of India’s (RBI) decision to not extend the loan moratorium beyond August 31, 2020. The apex court said it is a policy decision.

What is Supreme Court Judgement on loan moratorium?

What does it mean to waive interest?

In some cases, the financial institution is agreeing to “waive” interest for several months, meaning that the loan is truly interest free. When this happens, it can leave a person in a financial bind, especially if the person has other bills to pay or has experienced a recent job loss or medical crisis.

What is a waiver of interest?

The Holder hereby acknowledges and agrees that it shall not commence or prosecute in any way, or cause to be commenced or prosecuted, any action in any court relating to such accrued and unpaid interest. …

Is moratorium extended till 2021?

RBI extends On Tap TLTRO deadline till 31st December 2021 This extension has come in as a measure to support the sectors that have been badly hit by the second wave of the Covid pandemic. This is a measure to ensure that there is sufficient liquidity support available to these ailing sectors.

Will RBI moratorium be extended?

No extension of loan moratorium, but RBI introduces debt resolution plan for eligible borrowers. Analysts said the step was in the right direction and would cover roughly 50-55 per cent of the loans in the banking system.

What would happen if Supreme Court allowed interest waiver in moratorium?

RBI had estimated a loss of almost Rs 2 lakh crore if the Supreme Court had allowed interest waiver in the moratorium period, this would translate to nearly 15\% of the banks’ net worth in financial year 2019. Currently the moratorium book of the banking system stands at 39\% of the overall loan book.

Will interest be charged on accrued interest during moratorium period?

Although the apex court in its previous hearing ruled out a complete interest waiver on term loans during the moratorium period, the bench seeks to know whether interest will be charged on accrued interest during the said period.

How will the moratorium affect profit in FY21?

“Our analysis shows that the interest forgone on the accrued interest in the moratorium book for a period of six months could impact FY21 operating profits in the range of 0.5-2.6\%,” said brokerage firm Motilal Oswal in a research note post the Supreme Court hearing last friday.

Will DCB Bank be worst affected by interest waiver?

The Finance Ministry will today after having talks with the central bank, update the Supreme Court on whether it plans to charge interest on the accrued interest during the period. DCB Bank would have been the worst affected in case of a complete interest waiver, hitting 111\% of its pre-provision operating profits.