The Supreme Court on Tuesday rescheduled the hearing on the batch of petitions seeking relief in the form of extension of loan moratorium period beyond six months or waiver of interest on interest to Wednesday. The apex court was scheduled to start the proceedings at 12 pm but the bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah will now take up the case for hearing at the end of the board.

The apex court on October 5 had asked the Centre and the Reserve Bank of India (RBI) to place on record the KV Kamath committee recommendation on debt restructuring due to COVID-19 related stress on various sectors as also the notifications and circulars issued by them so far on the issue of loan moratorium.

The apex court's direction came after the Finance Ministry decided to grant relief to individual borrowers as well as medium and small industries by agreeing to waive compound interest (interest on interest) charged on loans of up to Rs 2 crores for a six-month moratorium period announced due to the pandemic.

Here are the main highlights from the Supreme Court Loan Moratorium case hearing today:

Interest Waiver hearing begins in Supreme Court. The apex court says the matter will be taken up tomorrow as the bench is not available for hearing after lunch.

Supreme Court to now hear the #InterestWaiverCase tomorrow pic.twitter.com/ViMFFvKOrl

— CNBC-TV18 (@CNBCTV18Live) October 13, 2020

StandBy: Only 1 case left, before SC takes up the interest waiver case. We are only a few more mins away from the hearing, reports CNBC-TV18's Ashmit Kumar.

Five more cases to be heard by Justice Bhushan led bench of SC, before considering interest waiver case.

SC has to go through a total of 24 other cases to consider, before arriving at the interest waiver case. So far, SC has heard 14 of the 24 cases. 10 cases still remain.

The Bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah will take up the case for hearing at end of the board.

SC has "passed over" the interest waiver case. Schedule to be considered at 12 Noon. Now will be taken up later today. (Reports CNBC-TV18's Ashmit Kumar)

1/n

Interest Waiver Hearing to begin shortly in SC.Justice Bhushan led bench to begin hearing by 12 Noon.Govt, RBI batting for no further relief from SC.@CNBCTV18Live pic.twitter.com/MVHVfbjfmo— Ashmit Kumar (@AshmitTejKumar) October 13, 2020

During the October 5 hearing, senior advocate CA Sundaram, appearing for the real estate sector, said it has been completely left out which should not have been done "in this kind of scenario".

The Kamath panel had made recommendations for 26 sectors that could be factored by lending institutions while finalizing loan resolution plans and had said that banks could adopt a graded approach based on the severity of the coronavirus pandemic in a sector.

On October 5, a bench comprising Justices Ashok Bhushan, R Subhash Reddy and M R Shah took up the pleas alleging that banks have decided to charge interest on the EMIs which have not been paid by the borrowers from March one to August 31 after taking benefit of the loan moratorium scheme of the Reserve Bank of India (RBI). In the hearing conducted through video conferencing, the top court took note of the grievances that various sectors such as real estate have been left out under the new proposal by the Centre.

Moratorium period exceeding six months may result in vitiating overall credit discipline, says RBI to SC: A loan moratorium exceeding six months might result in vitiating the overall credit discipline, which will have a debilitating impact on the process of credit creation in the economy, the Reserve Bank of India (RBI) has told the Supreme Court (SC). In an affidavit filed in the apex court in the loan moratorium case, the RBI has said that a long moratorium period could impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments.

ALSO READ | CNBC-TV18 accesses copy of government's affidavit on interest waiver submitted in SC

Interest waiver case: Here's how small borrowers are impacted, a ground report by CNBC-TV18.

Here's a recap of the interest waiver case and loan moratorium issue in the Supreme Court.

Here's a recap from the October 5 Supreme Court hearing in the loan moratorium or interest on interest waiver case.

Here's a recap of the Supreme Court hearing on September 10 in the interest waiver case.

(Edited by : Ajay Vaishnav)

First Published:Oct 13, 2020 10:23 AM IST