India’s Supreme Court rejects petition asking for fresh loan moratorium

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Supreme Court of India
The Supreme Court of India

The Supreme Court on Friday rejected a public interest litigation (PIL) demanding fresh moratorium on loan repayments in view of the second wave of Covid-19.

The top court declined to pass an order on fresh loan moratorium and said the issues raised in the petition were in the realm of policy decisions.

The Supreme Court, however, said it was up to the government to assess and pass an appropriate order.

Last year, the Reserve Bank of India announced moratorium on loan repayments after the government imposed a nationwide lockdown to curb the spread of Covid-19 pandemic.

The moratorium on all term loans, including home, auto and crop loans, was announced to help customers overcome financial difficulties due to the coronavirus outbreak and subsequent nation-wide lockdown.

Last month, the Reserve Bank of India re-opened its one-time loan restructuring plan for individuals and small businesses affected by the state-wise lockdowns amid the second wave of coronavirus pandemic that has hit India badly.

Individuals, small business and micro, small and medium enterprises (MSMEs) having exposure of up to ₹ 25 crore, who did not avail restructuring earlier and where loans were classified as standard as on March 31, 2021 were eligible for loan restructuring in the second round.

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