Govt Forms Panel To Study Impact Of ‘Waiving Interest And Interest On Interest’ Of Loans During 6-Month Covid-19 Moratorium Period 

The Union government on Thursday (Sep 10) set up a three-member committee to assess the impact of waiving interest and interest on interest on loans during the moratorium offered to Covid-hit borrowers that ended August 31.

The committee, which was announced late on Thursday, will submit its report within a week.

Rajiv Mehrishi, a former Comptroller and Auditor General (CAG), will be the chairperson of the committee. Ravindra H Dholakia, a former professor at IIM Ahmedabad and member of Monetary Policy Committe, and B Sriram, a former managing director at State Bank of India and IDBI Bank, will be the other members.

The committee will measure the impact on economy and financial stability on the "waiving of interest and waiving of interest on interest on the Covid-19 related moratorium", said a government statement, referring to the disease caused by the virus.

The committee will also suggest measures to mitigate the financial constraints of various sections of society due to any such decision.

The Supreme Court on Thursday (Sep 10) extended its interim order that no account is to be declared as "non-performing" till further orders after the government said an expert panel has been set up to look into the issue of interest being charged by banks.

The court wants the government to address two issues — whether interest can be charged on interest and whether credit rating agencies can downgrade a business that’s been hit by the pandemic during the moratorium period.

The court gave two weeks to the government and Reserve Bank of India (RBI) to file an affidavit and place before it the decisions taken in this regard.