oppn parties Supreme Court to Centre - Come Up With Something Concrete on Easing The EMI Burden In 14 Days

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  • EMI's set to rise after the RBI hikes key policy rate
  • Calcutta HC says that the right to privacy does not end with the death of a person
  • Supreme Court says that a delayed order of preventive detention makes it invalid
  • Shashi Tharoor posts an erronous map of India in his manifesto, rectifies the error after criticism
  • Sonia Gandhi to take a call on who will be Rajasthan chief minister
  • Mallikarujun Kharge to be the new candidate to oppose Shashi Tharoor in the Congress presidential elections
  • RBI says that the September inflation rate may be higher than 7%
  • RBI hikes key rates by 50bps, downwardly revises FY23 growth rate to 7% from 7.2% earlier
  • Stocks recover well on Friday: Sensex gains 1016 points to0 57426 and Nifty 276 points to 17094
  • Mirabai Chanu wins gold easily at the National Games
  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
RBI hikes key rates by 50bps, stocks jump and recover 50% of the losses incurred in the last few session
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Supreme Court to Centre - Come Up With Something Concrete on Easing The EMI Burden In 14 Days

By Sunil Garodia
First publised on 2020-09-11 06:50:50

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

The Supreme Court has extended the moratorium granted to borrowers until September 28. The moratorium was granted by the Centre to companies and individuals from March to June and then extended until August 31 to enable borrowers to tide over the difficulties they were facing due to the lockdown and closure of business activity which had resulted in no income for companies and businessmen and loss of job or reduction in salary for others.

But although unlocking started happening from June, economic activity has not picked up to reach earlier levels. While the entire economy is facing distress, some sectors are in dire straits. Order books of many companies are at levels where it is unprofitable to produce. The job scenario is equally dismal. The GDP had contracted by as much as 24 percent in the first quarter of this financial year and the core sectors contracted by a further 9 percent in July. The situation has not changed much from March. In fact it has gotten worse for many as in the absence of income, a major part of their liquid savings have been cannibalized by living expenses in the last five and a half months.

The Centre had earlier informed the apex court that the moratorium was extendable up to two years. But it had also said that if interest was not charged on missed EMIs, the banking system would face distress and the interest of depositors will suffer. The Supreme Court had then asked the Centre not to hide behind the RBI but to think of providing relief to stressed borrowers. In today's hearing of the case, the court categorically asked the Centre to come up with a concrete plan on how it wanted to do that in 14 days and clearly said that no more time would be granted. That effectively means that if the government does not come up with a plan, the court will decide on the matter and provide relief as it thinks fit.

The court also said that banks will not classify any loan as NPA until September 28 and the credit ratings of borrowers must not be affected due to non-payment until that date. But individual borrowers have reported harassment by collection agents of banks and have also reported that in some cases, the banks have sent adverse reports to credit bureaus that have resulted in their credit rating being downgraded. The government must look into this and set up a centralized complaint line where people can report about this.

The economic distress arising out of the pandemic is "an act of God" and it is the duty of the government to help companies and individuals in these dark times. No one is asking for waiver of loans, but a just solution that does not stress the banking system while at the same time provides time to the borrowers must be found. Otherwise, a lot of genuine borrowers (who have the will to pay back loans but do not have the resources at present) will become defaulters, lose their dignity and will not be able to access funds from the banking system for future growth.