The Indian stock market is trading in the green amid high volatility with Sensex up 68.44 points or 0.14 percent at 49839.73, and the Nifty added 19.50 points or 0.13 percent at 14755.90.
Banking stocks have edged higher with the PSU Bank index gaining over a percent while Bank Nifty added half a percent. The stocks reacted after the Supreme Court said that complete interest waiver is not possible.
The Apex Court, on March 22, said a complete waiver of interest during the six-month loan moratorium period was not possible, and that it could not allow extension of the moratorium.
A bench comprising three judges pronounced its judgment on a batch of petitions seeking the complete waiver of interest and extension of the loan moratorium period in view of financial pain due to COVID-19.
The court said granting such relief could have consequences for the economy.
Also Read: Loan moratorium case: SC says complete interest waiver not possible
“From various steps taken by Centre and RBI, it cannot be said that the Centre has not taken steps in the backdrop of COVID-19. Therefore, petitioners will not be eligible for a waiver of interest on interest, extended moratorium period or sector-specific reliefs,” Justice MR Shah said, as quoted by legal news website Bar & Bench.
Among the banking names, Bank of Maharashtra and Indian Overseas Bank jumped 9 percent each followed by Central Bank of India which was up 4 percent. Bank of Baroda and Bank of India were up 2 percent each. The other gainers included Indian Bank, Union Bank of India and Canara Bank.
Heavyweights like HDFC Bank, ICICI Bank and State Bank of India gained over half a percent each.
Share price of PNB along with Bank of Baroda were some of the most active stocks on NSE in terms of volumes wherein 6,61,64,152 shares and 4,15,16,729 shares were traded followed by State Bank of India where 2,59,12,416 shares were being traded.
The SC said interest on interest (compound interest) should be waived for all borrowers, regardless of the amount. Any such amount that has already been collected shall be adjusted in the next instalment payable.
The top court said judicial review was not possible on economic policy matters.
“What is an economic policy or what will be the financial package will be decided by the Centre and RBI after detailed consultations. Only if some sectors are not satisfied Court cannot intervene in such matters of policy,” Justice MR Shah said.