The plea has stated that the borrowers are stressed due to the pandemic and lockdown-like situation and asked for directions to the Centre.
The plea has stated that the borrowers are stressed due to the pandemic and lockdown-like situation and asked for directions to the Centre.

Supreme Court to hear PIL over financial stress to borrowers due to Covid-19

The petition has asked the court to issue directions to the Centre to ask banks and financial institutions to not take strict action against the property of borrowers for six months.
By hindustantimes.com | Edited by Amit Chaturvedi, Hindustan Times, New Delhi
PUBLISHED ON MAY 24, 2021 07:07 AM IST

The Supreme Court will on Monday hear a Public Interest Litigation (PIL) on the financial stress faced by the borrowers during Covid-19 time. The PIL has been filed by a lawyer Vishal Tiwari and seeks directions to the Centre to take measures to overcome the financial stress.

The petition will be heard by a two-judge vacation bench of justices Ashok Bhushan and MR Shah.

The PIL sought direction to the Centre to permit all the lending (financial) institutions to grant interest-free moratorium period for term loan and defer the payment of loan instalments for a period of six months or till the situation from Covid-19 normalises.

It has also sought a direction from the Centre to banks and other financial institutions to not take strict action against the property of a borrower for six months, citing the tough lives of daily wage earners which has been affected by lockdown-like measures imposed due to the pandemic.

"Their financial burden should be decreased and citizens should not lose their dignity. Financial policies are made by the government but in the present time above financial policies, the question is of survival. And the population of our nation should survive with dignity and without any stress," the petitioner said in his plea.

In March this year, the Supreme Court ordered banks against charging borrowers any penal interest or compound interest (interest on interest) on loans during the moratorium on repayment of loans from March to August 2020 in view of the Covid-19 pandemic.

It rejected a request by individuals and traders’ associations for waiver of complete interest during the moratorium.

The court clarified any penal interest or compound interest charged by banks for non-payment of any loan amount during moratorium shall be refundable. And if the bank is not in a position to refund, the same shall be adjusted in the loan amount, it added.

The bench said decisions on economic policy matters should be left to the government and courts should not interfere even if a second view is possible.

(With inputs from agencies)

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