Loan moratorium: Three-member expert panel to assist govt for assessing relief to bank borrowers

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Now, the banks cannot declare any loan as bad loan in the absence of non-payment of the loan amount till September 28

The Centre on Thursday constituted a three-member expert committee for making an overall assessment of relief to bank borrowers in the wake of the Supreme Court order extending loan repayment moratorium till September 28.

The expert panel will submit its report within one week.

The expert committee comprises Rajiv Mehrishi, former CAG of India – Chairperson, Ravindra H Dholakia, former MPC member of Reserve Bank of India and B Sriram, former MD, State Bank of India & IDBI Bank.

After the apex court order, the banks cannot declare any loan as bad loan in the absence of non-payment of the loan amount till September 28.

The Supreme Court granted the Centre, Reserve Bank of India (RBI) and banks two weeks’ time to work together and file a concrete reply on their stand on waiving of interest charged during loan moratorium and related issues.

“The terms of reference includes measuring the impact on the national economy and financial stability of waiving of interest and waiving of interest on interest on the COVID-19 related moratorium. Suggestions to mitigate financial constraints of various sections of society in this respect and measures to be adopted in this regard," said the Finance Ministry in an official statement.

State Bank of India will provide secretarial support to the committee. The expert committee may consult banks or other stakeholders, as deemed necessary, for the purpose.

The RBI had in May extended moratorium on term loans till August 31 to reduce the financial difficulties of citizens in the wake of the nationwide lockdown after the outbreak of COVID-19 early this year.

In March, the RBI had allowed a three-month moratorium from paying EMIs and other loans on payment of all term loans due between March 1 and May 31, which was extended to another three months.

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