NEW DELHI: On Thursday, the Supreme Court ordered the provisional extension of the loan moratorium until September 28, ordering banks not to label any loans as delinquent until further instructions. The high court adjourned the case for the last time, giving the Center, the Reserve Bank of India (RBI) and the banks two weeks to work together and present a concrete response on their position on waiving interest charged during the year. moratorium period.
The interim order was approved by the high court headed by Justices Ashok Bhushan and comprised of R Subhash Reddy and MR Shah as it listened to a batch of petitions seeking waiver of interest or waiver of interest on interest on EMIs suspended during the period. moratorium extended amid national shutdown due to covid-19 outbreak.
The higher court will continue hearing the case on September 28.
The three-judge court took note of the presentations made by Attorney General Tushar Mehta, representing the Center. He noted that the government at the highest level was considering all the issues in this batch of allegations related to the loan default. The government must present a concrete response within two weeks, considering all sectors in a comprehensive manner.
The order also noted that an expert committee had been set up to examine all the problems and that the government will take action.
The court took into account concerns raised by Chief Counsel Harish Salve of the Indian Banking Association (IBA) regarding individual borrowers, as well as other sectors, that individuals will be adversely affected and decisions must be made through the finance ministry and not just the RBI.
Lead attorney Kapil Sibal, representing Real Estates Associations, argued that “downgrading of borrowers is still ongoing. Borrowers must be protected against such downgrading.”
Salve and Mehta opposed the request for a reduction and sought a period of two weeks to address this problem. Salve, when applying to the bank, said: “Please do not approve any demotion order today because this is based on many factors. Businesses will suffer. “
“We are willing to allow two weeks to present the corresponding affidavit. We make it clear that we will consider different sentences made by the petitioners on the next date. All decisions made by the RBI, the Government of India or the banks must be submitted to the consideration of the Court, “the bank said in its order.
On September 3, the court had approved a provisional order holding that accounts not declared as non-performing assets (ANP) as of August 31 will not be declared as non-performing assets until new orders are issued.
On May 22, the central bank extended the moratorium on term loans until August 31 amid the national lockdown due to COVID-19. In March, the central bank had allowed a three-month moratorium on the payment of IMEs and other loans on the payment of all term loans that mature between March 1 and May 31.
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