Mumbai: The All India Bank Depositors Association (AIBDA) has stated that the waiver of interest on bank loans during the period of moratorium will harm those depositing money in banks. The organization has said that any interest waiver will harm the existing loan culture and will affect the financial health of banks. AIBDA has said that depositors will be ‘severely affected’ by being allowed to waive interest as banks will reduce the interest rate on deposits to cover Nakusan. The AIBDA said that debt waiver was covered by the government in the past, but in the present circumstances, the central and state governments will not be able to do so due to the reduction in income.
Meanwhile, on June 12, the Supreme Court had met the Central Government and the Reserve Bank within three days and asked them to take a decision on waiving interest on interest for those who defer the loan installment during the moratorium period.
A bench of Justice Ashok Bhushan, Justice SK Kaul and Justice MR Shah said, “We want to know whether interest can be waived on interest.”
The AIBDA has stated that the media reports about the Supreme Court’s comments are very disappointing, making it necessary for the depositors to clarify their stand.
The secretary of the association, Amita Sehgal, has issued a statement saying that they are very much concerned about the possible interest waiver in the banking sector. The organization has said that interest waiver will also damage the financial health of banks along with credit culture.
