The Supreme Court on Thursday refused to interfere with an RBI circular on a loan moratorium but directed the apex bank to implement the March 27 circular that wanted banks and financial institutions to impose the moratorium on loans and interests for three months in “letter and spirit”. As many as four public interest litigations (PILs) were filed against the circular.

“It appears that benefits extended by the RBI are not being passed on. Proper guidelines for the enforcement of circular should be put in place & the RBI ought to oversee the implementation of the moratorium circular,” the apex court said.

The RBI circular gave banks the freedom to give a three-month moratorium on all home, personal and corporate loans that were outstanding as of March 1. A PIL filed before the apex court said the circular provided that interest would accrue on the outstanding portion of the loans during the moratorium period.

The petition argued that it made no sense for interest to accrue as people who opted for the moratorium would end up paying additional interest along with regular EMIs.

The petition had wanted the court to order the RBI not to permit banks to charge an interest during the period of moratorium.

It had also sought directions to the government and the RBI to “appropriately consider extending the moratorium period for a certain period so as to enable millions of persons who may become unemployed due to the Covid-19 emergency for some time even after the lockdown”.

A bench of Justices N.V.Ramana, Sanjay Kishan Kaul and Bhushan Gavai was initially not inclined to entertain the batch of petitions filed mostly by lawyers seeking action against the banks and financial institutions and a directive to the RBI and Centre to ensure the strict implementation of the circular.

Initially, the bench was of the view that the petitioners had no locus standi on the matter as none of them were the aggrieved parties and as such cannot move the Supreme Court seeking the enforcement of their fundamental rights.