New Delhi: State Bank of India has informed the Supreme Court that 90 per cent of borrowers did not avail the moratorium till 31 August on repayment of loans through EMI.
Senior advocate Mukul Rohatgi, who appeared for the country’s largest bank, said, “Nearly 90 per cent of borrowers have not availed the moratorium and are paying their EMIs regularly during the lockdown period. If on one hand the compound interest in deferred EMIs are not charged from borrowers, and on the other hand the banks are bound to pay compound interest on depositors’ money, how will the banks survive?”
Solicitor general Tushar Mehta said moratorium did not mean either waiver of interest or interest on interest but it was decided not to levy penalty on delayed EMIs.
“The RBI has taken a stand (that it would be imprudent to waive interest on interest which would cause havoc in the banking industry). It is now for the banks to take an appropriate decision. Banks are under obligation to pay interest on deposits,” he added.
These comments were made when PILs over waiver of interest on interest accrued on deferred EMIs came up for hearing in the apex court.