Government not interested in paying rupee 8,000 moratorium on banks

0

The banks have asked the government to pay the bill of around Rs 8,000 crore which they will have to return to customers because of the default interest, but the finance ministry does not seem interested.

The Association of Indian Banks (IBA) wrote a letter to the government on March 26 requesting representation to improve the scope of the “ex-Gracia program to cover the additional repayment of the Supreme Court order.”

A senior public sector banker explained that the position has been taken now because the criminal interest must also be repaid.

“Last time only compound interest or interest on interest was canceled. Interest on interest is around Rs 8,000 crore for the entire system. For criminal interest, we do not have an estimate at the moment. We charge criminal interest for various reasons such as failure to comply with certain conditions, failure to present certain statements, ”the senior banker said on condition of anonymity.

“According to the judgment, we have to adjust the penal interest in the next installment in April and we have to implement it,” the banker said.

However, the government seems to be clear that it will not shoulder the additional burden. The government believes that the onus of repaying compound interest charged to customers does not lie entirely on itself, a senior government official said. However, a final decision will be made at the highest level, he added. In addition, the government has yet to receive any proposals from the banks, and a final decision will only be made after consultation, he said.

On March 23, the Supreme Court ruled that banks cannot charge interest on interest on accounts that requested relief from the moratorium during last year’s pandemic period and that the amount collected must be repaid. during the next installment of the loan account.

The deadline for such a moratorium, the Supreme Court ruled, would be August 31, 2020, after which all loans that had not been repaid on schedule could be declared as non-performing assets (NPA). . Dismissing requests for an extension of the six-month moratorium period on loans, the court said that a full waiver of interest during the moratorium also could not be granted.

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor

Leave A Reply

Your email address will not be published.