The government set up a panel on Thursday to look into the issue of interest being charged by banks on instalments deferred during the moratorium period due to the COVID-19 pandemic. The three-member committee, under former Comptroller and Auditor General (CAG) Rajiv Mehrishi, will make an overall assessment to help the government make informed decision. The development comes as the Supreme Court is hearing petitions seeking a waiver of interest on deferred EMIs during the moratorium introduced by the Reserve Bank of India (RBI) to offset the financial hit taken by borrowers during the virus lockdown.
The panel will also assess various concerns raised in the ongoing hearing of petitions by the top court. It will have Ravindra H Dholakia, former member of the RBI's Monetary Policy Committee, and B Sriram, former managing director of SBI and IDBI Bank, as members.
The three-member panel will measure the impact of the coronavirus-related restrictions on the national economy, and the prospect of waiving interest on interest (interest for exercising the option to suspend EMIs due to COVID-19) on the pandemic-related moratorium.
The committee will come up with suggestions to mitigate the financial constraints of various sections of the society, and submit its report within one week.
The Rajiv Mehrishi-chaired panel may consult banks and other stakeholders, the Finance Ministry said.
Meanwhile, the top court extended an interim order that directed banks not to declare the standard accounts of any borrowers opting for the moratorium as bad loans till further orders.
It granted two weeks to the centre and the Reserve Bank of India (RBI) "to come up with something concrete" to help borrowers ease their EMI burden using an optional moratorium on repayment of loans allowed during the coronavirus crisis.
The Supreme Court was hearing a batch of pleas against the levy of interest on instalments deferred during the COVID-19 crisis under an optional moratorium allowed by the RBI to banks.