SC lifts NPA standstill, rejects moratorium extension and interest waiver

No interest on interest on moratorium loans

The Supreme Court on Tuesday ruled that banks cannot charge interest on interest for accounts that sought moratorium relief during the pandemic period last year and the amount so collected must be refunded in the next instalment of the loan account.

The cut-off for such moratorium, the apex court ruled, would be August 31, 2020, beyond which all loans that had not been repaid as per schedule can be declared as non-performing assets (NPA). Rejecting the pleas to extend the six-month loan moratorium period, the court said a complete waiver of interest during the moratorium cannot be granted either.

Banks can also