Loan Moratorium Case-Supreme Court Refrains From Interfering In Economic Policy Decisions: ICICI Securities
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ICICI Securities Report
The Supreme Court’s judgement in ‘interest on interest’ waiver case is encouraging, especially in spirit as it limits scope for judicial review of economic policy decisions.
Given that no rationale was submitted for restricting the relief of ‘interest on interest’ waiver to loans up to Rs 20 million, the SC has ruled that it should be extended to all loans.
Our reading suggests the verdict is applicable only to loans under moratorium as it states that any amount ‘already recovered’ shall be refunded to the ‘concerned borrowers’, or be credited/adjusted in the next instalment.
However, we await clarity on whether the cost will be borne solely by financiers, or shared by the government.
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