⁍ Gajendra Sharma’s $13,500 debt risks destabilising India’s banks, authorities warn.

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⁍ A complaint he brought challenging the loan relief plan could mean a $27 billion hit to lenders.

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⁍ The battle has the central bank and government struggling to defend what was meant to be a helping hand.

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– When Gajendra Sharma heard India’s government was offering him a six-month moratorium on repayments on his $13,500 home loan, he thought it was a relief. But the 53-year-old optician has now joined more than 120 other borrowers in suing over the moratorium, which they say unfairly requires them to pay more in interest while their payments are suspended, reports Reuters. “I realized this scheme was not to give us relief, but to give us more grief,” says Sharma, who is also paying $2,700 a month on a $21,700 business loan he didn’t ask for a moratorium on. The government says the moratorium is necessary to combat the country’s “pandemic” of bad loans, which hit a record 23.9% in the April-June quarter, per Reuters. But Sharma and his fellow borrowers—including a real estate group, power utilities, shopping malls, and small businesses—say the moratorium unfairly hits them even as many have been financially devastated by the pandemic, that the banks must forgive the interest and compound interest that accrued while their payments were suspended. Now, even with the moratorium, “the interest-on-interest will result in winding up various real estate and other companies,” says a lawyer representing one group of Sharma’s fellow complainants. The battle, launched from Sharma’s small shop in Agra, is now involving more than 120 lawyers and has the central bank and government struggling to defend what was meant to be a helping hand. The Reserve Bank of India says a waiver of interest would cut the sector’s income by at least 1% of India’s 1%.