The Central government has set up an Expert Committee to make an overall assessment in the matters relating to waiver of interest and waiver of interest on interest on the loans under moratoriumdue to Coronavirus lockdown. The decision to constitute the Committee was taken by the government after several concerns were raised before the Supreme Court in relation to these issues.
The Committee will be headed by Shri Rajiv Mehrishi, the former Comptroller Auditor General of India. Other members of the Committee are Dr. H Dholakia, former Professor at IIM Ahmedabad and former member of the Monetary Policy Committee of the RBI, and Dr Shri B. Sriram, former MD of State of India and IDBI Bank.
The Committee is entrusted to measure the impact of waiver of interest and waiver of interest on interest on the national economy and financial stability. It will also suggest measures to be adopted to mitigate the financial constraints of various sections of society. The Committee can also make any other suggestions that it considers necessary in order to deal with the current situation. One week’s time has been given for the submission of the report by the Committee. Banks or other stakeholders can be consulted by the committees while preparing the report. The State of Bank of India will be providing secretarial support to the committee.
Today, the Supreme Court extended the moratorium on loan repayment till September 28 after the previous deadline ended on August 31. The court also directed the Banks not to declare any loan as Non-Performing Asset (NPA) on account of non-payment of the instalments during the COVID-19 pandemic period.
In the month of May this year, the RBI had announced various measures to deal with the slowdown in the economy due to lockdown. The measures included extending loan moratorium and reducing interest rates to boost the economy.