On 10th September 2020, The Ministry of Finance formed a three-member expert panel headed by Rajiv Mehrishi, former comptroller and Auditor General of India to assess the impacts of the waiver of interest on the moratorium loans offered to the COVID-19 affected borrowers which ended on 31st August 2020.
Ravindra H Dholakia, Former professor of IIM Ahmedabad and former member of Reserve Bank of India(RBI)’s Monetary Policy Committee and B Sriram, former Managing Director of State Bank of India(SBI) and IDBI Bank are the other members of the committee.
The panel will submit its report within one week.
Committees Terms of reference:
i.The committee will assess the impact of ‘waiving interest’ and ‘interest on interest’ on the COVID-19 related moratorium on the national economy and financial stability.
ii.The committee will suggest the measures and rules to control the financial constraints in the society.
iii.The SBI will provide the secretarial support to the panel and the committee is allowed to consult banks and other stakeholders.
iv.The panel will also assess the impacts on the depositors which includes the pensioners and the banks that function as commercial entities that contribute to the overall economy.
i.The RBI allowed the banks to offer a three months’ moratorium on the principal and interest payments from 1st March 2020 to support the borrowers affected due to the COVID-19 pandemic.
ii.This moratorium was given an additional three months’ extension on 22nd May 2020 which ended on 31st August 2020.
i.The Supreme Court gave two weeks’ time to the central government, RBI and banks to clear their views on waiving interest during the 6months period.
ii.The court directed the banks not to declare any loan (loans that were not categorized NPA as of 31st August) as non-performing assets(NPA).
iii.The government has also rejected the request for the uniform interest waiver policy stating that all the loan accounts were different and the relief provided were on a case to case basis.
Recent Related News:
i.On August 24, 2020, Centre sets up a panel under the chairmanship of Valipe Ramagopal Rao director Indian Institute of Technology (IIT), Delhi to modify the charter of duties of 57 DRDO labs on the basis of current and futuristic defence and battlefield needs.
ii.On July 24, 2020 the Ministry of Human Resource Development set up a committee headed by UGC Chairman, D.P. Singh to form guidelines and suggest measures to ensure that more students study in India and there is a smooth transition for students returning from abroad due to COVID-19 situation.
About Ministry of Finance:
Union Minister– Nirmala Sitharaman
Minister of State– Anurag Singh Thakur
Departments– Department of Economic Affairs, Department of Expenditure, Department of Revenue, Department of Investment and Public Asset Management and Department of Financial Services.