The Supreme Court has observed that there is no justification for charging compound interest or penal interest during the period of loan moratorium which was allowed by the Reserve Bank of India from March 1 to August 31 last year on account of the COVID19 pandemic. The Court observed that compound interest is chargeable on wilful or deliberate default by the borrower to pay the due installments. So, when the installments have been deferred based on the moratorium declared by the RBI, the non-payment of installments cannot be termed as willful. Therefore, there is no justification in charging compound interest, which is in the nature of a penal interest, during the moratorium period, the Court said. Reddy & Reddy law firm has a forte in dealing with Corporate matters. Their team of experienced lawyers assists its matrimonial clients from filing to the case to meditation to every step of the way till the end.