The Supreme Court on Tuesday orally said it will not pass any order which will risk the economy going “haywire” after the Centre revealed that a blanket waiver of interest on debts incurred by all classes and categories of borrowers for the moratorium period will mean forgoing an estimated over 6 lakh crore.
“If the banks were to bear this burden, it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the banks unviable, and raising a very serious question mark over their very survival,” Solicitor General Tushar Mehta submitted before a bench led by Justice Ashok Bhushan.
Counsel for the Reserve Bank of India, senior advocate V. Giri, said the discretion to frame a resolution plan should be with the bank and not the borrower, pandemic. Mehta said a possible crippling of the banking sector was one of the main reasons for “not even contemplating waiver interest” and restricting relief to “deferment of payment of instalments”.
Mehta explained that for every loan account there are about 8.5 deposit accounts in the Indian banking system.
Reference:
https://www.thehindu.com/news/national/moratorium-sc-says-no-order-to-risk-economy-going-haywire/article33278078.ece
