“Real Estate Shouldn’t Expect Any Special Aid” Shardul Shroff

The Supreme Court has told the government to implement the interest-on-interest waiver scheme for small borrowers. So what does this mean for banks and the real estate sector.

Interest-on-interest here means that borrowers will have to pay additional interest if they had availed the moratorium offered by banks between March and August.

Shardul Shroff, Executive Chairman of Shardul Amarchand Mangaldas & Company shared his thoughts on this in an interview with CNBC-TV18.

Real estate has been among the sectors most vocal in its demand that interest-on-interest be waived.

“I do not think the court has now the opportunity to look into real estate issues because it has taken quite a long time,” Shroff said.

“It is very possible that they will cover it broad-brush rather than going into a specific industry or it may be a type of loan which will be used to classify the relief,” he said.

According to him, banks will not be asked to bear the tab of interest on interest waiver.

“However, there might be a time synchronization issue because ultimately government will have to reimburse specific amounts with time element,” he said.

“It’s not going to be an instantaneous process. It may take some time. So there may be some gap between the time when the government notification and the RBI notification will be implemented in terms of exact value so that the government can reimburse it,” added Shroff.

(Source: CNBC TV18)