The Supreme Court on Tuesday directed that there should be no charging of compound interest, interest on interest or penal interest on the installment which were due during the loan moratorium period from March 1 to August 31 last year on any borrower, irrespective of the loan amount. If such interest has already been collected, it should be either refunded to the borrower or adjusted towards the next installments. The bench observed that there is no rationale in the Centre's policy to limit the benefit of waiver of compound interest only to certain loan categories less than Rs Two Crores. the Court observed that it was not possible to order complete waiver of interest during the loan moratorium period, as the banks have to pay interest to depositors, pensioners etc. Banks have to meet administrative expenses as well. Further, the Court rejected the petitioners' prayer for extension of the 6 month loan moratorium period granted by the Reserve Bank of India on account of Covid-19. The Court also clarified that the moratorium circular will apply not just to banks but also to Financial Institutions.The Court allowed the petitions to the limited extent of directing that there should not be charging of any compound interest, interest on interest or penal interest on any borrower during the moratorium period.