Pointing out that the meratorium on loans was a temporary solution, RBI Governor on Thursday, 27 August, said “(the) resolution framework is expected to give a durable relief to borrowers facing COVID-19-related stress.”
“We have not exhausted our ammunition, whether on rate cuts or other policy actions,” Das further told news agency PTI, adding that being overly risk-averse is self-defeating for banks
The Supreme Court had, on Wednesday, pulled up the Centre for not taking a stand on waiver of interest on interest in the loan moratorium period during a hearing against financial institutions levying interest on loans while the temporary suspension period was on.
According to ANI, RBI Governor Shaktikanta Das was speaking at a newspaper event.
Das also lauded RBI’s response to the situation created by the COVID-19 pandemic.
“RBI’s response to the situation arising out of COVID-19 has been unprecedented. Measures taken by the RBI are intended to deal with the specific situation of COVID-19 and can not be, obviously permanent.”Shaktikanta Das, according to ANI
Further, Das said, that the Indian banking system continues to remain safe and stable.
BACKGROUND
According to IANS, the Supreme Court observed that it appears the Centre is hiding behind the Reserve Bank of India’s decision on this issue, especially when it has ample powers under Disaster Management Act, where it can take a decision by stopping the banks from charging interest on deferred EMIs and waive interest on interest for a moratorium period.
A bench comprising Justices Ashok Bhushan, R Subhash Reddy and MR Shah told the Centre that it cannot be interested only in business and not care about the sufferings of people.
(With inputs from PTI, IANS.)
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