The central bank’s affidavit explained that by a September 7 notification, it had laid down the thresholds for the 26 sectors based on Kamath Committee recommendations. This specifically addressed the issues concerning power and real estate. The affidavit stated that even in respect of borrowers who were in financial difficulty when the pandemic broke out, there will be no bar on restructuring such accounts as the lending institutions will be free to make their own assessment. Divakar Vijayasarathy, founder and managing partner at consulting firm DVS Advisors LLP, said the concern of RBI is genuine and well founded. “Further Extension of moratorium would have been catastrophic for the quality of banking portfolio and to the credit culture of the borrowers. Wish courts let regulators take decisions based on sound economic practices. We should also not forget that banks raise funds from small depositors and retail shareholders and any further extension would have put their stakes at risk,” Vijayasarathy added. Chartered accountant Vijay Kumar Gupta, former Central Council Member of the Institute of Chartered Accountants of India (ICAI), said, “The banking regulator should be allowed to take prudent decisions so that the sector should not fall sick, which will have larger and adverse implications for the economy. Borrowers must, however, be protected through fiscal stimulus and budgetary measures.” Along with the RBI, the Centre too filed an affidavit in the Supreme Court in the loan moratorium case. The ministry of finance, in its affidavit filed on Friday, told the Court that the decision to waive off “interest on interest” will have to undergo appraisal by the Expenditure Finance Committee and thereafter would be placed for approval of the Union Cabinet. Only then the decision will mature into an Office Memorandum or circular or order. The reply came pursuant to a query put by the Court on Monday asking the Centre when the notification announcing waiver on compound interest on repayment of loans during moratorium will be issued. Its only after the notification will be issued, the lending institutions will be in a position to implement the Scheme. Further, the Centre urged the Court not to entertain further judicial review on the petitions pending before it as “fiscal policy is the remit of Government”.