Money & Banking

Supreme Court verdict: Additional relief of about ₹7,000 crore may have to be given to borrowers

Surabhi Mumbai | Updated on March 23, 2021

The Centre may have to allocate an additional ₹7,000 crore as relief to borrowers following the Supreme Court verdict on loan moratorium on Tuesday, according to analysts.

“As per our estimates, the compounded interest for six month of moratorium across all lenders is estimated at ₹13,500 to ₹14,000 crore,” said Anil Gupta, Vice President – Financial Sector Ratings, ICRA.

Pointing out that the Centre has already announced relief for borrowers having borrowings up to ₹2 crore, which was estimated to cost about ₹6,500 crore to the Exchequer, Gupta said, “With announcement of waiver for all borrowers, the additional relief of about ₹7,000 crore to ₹7,500 will need to be provided to borrowers.”

Mahesh Misra, CEO, IMGC welcomed the Supreme Court judgement and said, “The court has limited its scope to judicial review and not opined on the merits of the policy. Any other outcome would have created a potential moral hazard and also penalized conscientious borrowers. This creates the right precedent as well.”

Published on March 23, 2021

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