The Finance Industry Development Council (FIDC), which represents non-banking finance companies, has supported the Reserve Bank of India’s stand for levying interest on loans under moratorium.
“FIDC fully supports the stand taken by the RBI on the issue of banks and NBFCs levying interest on loans where moratorium has been granted to enable borrowers to cope with the economic situation arising out of the Covid-19 pandemic,” it said in a statement on Friday.
Noting that the moratorium granted is only a deferral of EMIs and loan repayment, the council said levy of interest on the amount deferred at the normal rate of interest is fair and proper and merely compensates lenders for their costs and risks.
“Waiver of interest on the deferral amount would in FIDC’s opinion, be unjust, unfair and have a significant negative impact on the financial system and health of banks and NBFCs,” it further said.
The Supreme Court has been hearing a petition for waiver of interest during the loan period.