InvestorQ : What is the latest update on the EMI interest case that is going on in the Supreme Court?
Dhwani Mehta made post

What is the latest update on the EMI interest case that is going on in the Supreme Court?

Answer
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Khushi Patel answered.
3 months ago


The case will come up for hearing only in the first week of August but some interest arguments are expected from both sides. The Supreme Court has asked the government and the RBI to jointly come up with a final answer on whether interest should be charged on the waived EMI for the six month period. Here, the Supreme Court is only referring to the interest on interest, which is going to be charged for the 6 month period. RBI had argued that waiving interest would be credit negative for banks but that is not what the SC is asking for anyways. The SC contention is that if you give a deferral to ease the liquidity crunch and then charge interest on interest, then it defeats the entire purpose of the EMI deferral. The issue is likely to come up for hearing in the first week of August, well before the second round of EMI moratoriums expire on 31 August. While Tushar Mehta has made arguments in favour of not waiving interest charges since there is interest to be paid on deposits, the Supreme Court surely has a point on whether interest should be charged on interest.