Srinagar, Sep 29: As the moratorium on bank loans ended on August 31 and financial institutions started deducting Easy Monthly Installments (EMIs), the borrowers have started to feel the pinch.
It may be recalled that as the country went into the lockdown mode to trim the spread of COVID-19 earlier this year, the Reserve Bank of India on March 27 this year had allowed a moratorium for all banks for three months on payment of all installments due between March 1 and May 31. The RBI had further allowed the banks to extend the moratorium till August 31, but had cautioned against the health of the bank sector.
The RBI had made clear that moratorium will be applicable only on EMIs and the borrowers will have to pay the interest and it won’t be waived off.
A petition has been filed in the Supreme Court to seek waiver of interest during the lockdown period as everyone’s income has been hit in the country. The Supreme Court has asked the Centre to draft a plan on loan moratorium quickly and fixed October 5 as the next date of hearing.
A businessman from Kashmir while talking to Precious Kashmir said, “Business activities in the Valley have been hit for the past one year after the abrogation of Article 370 on August 5, 2019. Kashmir’s economy is in dire straits. We have no idea about what the future holds for us.”
He said, “We have been requesting the financial institutions to give us some relief as interest on the loans which we had taken has accumulated manifolds. We haven’t earned anything during the past one year. We have no idea about how to clear our debts.”
The businessman said, “During the past one year many shops and agencies dealing with various products have downed their shutters. Thousands of people working in the private sector have lost their jobs and livelihood. Economy cannot get revived till the government intervenes.”
He said, “If the government really wants to infuse new life into J&K’s economy besides announcing a special package for the business houses, it needs to bear the interest component which has accumulated. The foundation of naya J&K cannot be laid on the basis of the weak economy.”
An economist said, “The Supreme Court’s intervention is a welcome move but it appears that the Centre has no plan to intervene as if the government decides to waive of the interest component it can lead to closure of many banks. Let’s see what reply Centre files on October 5, i.e. the next date of hearing.”