Here are 10 things to know about this big story:
The centre told the top court that consultations are taking place at the highest level. The government is in discussion with banks and other stakeholders for relief, meetings have taken place and concerns are being examined, it told a three-judge bench.
Welfare will be extended to borrowers and the government must consider data for giving relief to them, said the Supreme Court.
The government must include specific details in its plan for borrowers, such as the compound interest to be charged and any impact on the credit rating for taking the moratorium. The plan must be presented in the next hearing, on September 28, so that an appropriate order can be issued, it said.
The finance ministry said it has set up an expert committee, under former Comptroller and Auditor General (CAG) Rajiv Mehrishi, for making an overall assessment to ensure better informed decisions in this regard.
The earlier order on standard accounts of borrowers opting for the moratorium not to be declared as non-performing loans will continue, said Justices Ashok Bhushan, R Subhash Reddy and MR Shah through video conference.
In some relief to stressed borrowers, the Supreme Court had ruled last week that loan accounts of borrowers availing the moratorium - or a delay in loan repayments - will not be declared as bad loans till further orders. The borrowers need to be protected and banks should not take any coercive action against them, the top court had held.
A number of associations representing sectors such as banks and real estate developers are part of the hearings.
While the petitioners have demanded a waiver of interest on interest (interest for exercising the option to suspend EMIs due to COVID-19), the government and the RBI are of the view that writing off interest will weaken banks and affect economic conditions. The centre and the RBI say that a waiver of interest on deferred EMIs would be against “the basic canons of finance" and unfair to those who repaid loans as per schedule.
The top court has been told that the loan moratorium can be extended by up to two years on account of the coronavirus-related situation.
The central bank had in March granted a three-month loan moratorium due to the pandemic-induced situation, and extended it till August 31 in May.