The Supreme Court continued with the hearing of the allegations of extension of the credit moratorium along with the requests of specific sectors.
State Attorney General Tushar mehta made presentations on behalf of the central bank of judges Ashok Bhushan, R Subhash Reddy Y Mr. Shah, the crux of which was that the sector-specific problems emanating from these petitions could not be remedied under Article 32.
“It is not a case for your Lordships to go further under the jurisdiction of a brief. The center took all sectors into hand. Their argument that the NDMA did nothing were nothing more than arguments made with desperation. If problems persist. sector specific, they are free to go to the RBI, but to seek help under Article 32 and pray that aid (s) already granted cannot be sustained “
– Attorney General Tushar Mehta to the Supreme Court
The law enforcement officer said that the Central Government realized and accepted that there was a problem and that there had to be a solution, but that it had to be sector specific.
“The solutions must be fulfilled institutionally and within the frameworks provided,” he added.
The Center told the Supreme Court that implementing interest waivers would mean that a huge waiver would be attracted, which in turn would hurt the economy. “If banks were to bear this burden, it would necessarily wipe out a substantial and larger share of their net worth, rendering most banks unviable and raising a serious question about their own survival “ SG said while stating that a blanket interest exemption would mean giving up an estimated 6 lac crore.
Justice Bhushan He told him at this juncture that the courts were aware of this and that he would not pass any order that would shake the economy.
“Of course, the court will not approve an order that drives the economy crazy. We are aware of the fact.”
– Supreme Court
On the aspect of the Center’s indifference to the economic tensions faced by various sectors, which was argued by the petitioners, the Attorney General said that the interest exemption was never the solution in any economy, but to provide impulses to boost various sectors. it was the correct way to proceed.
“The center did nothing – I am responding to this argument now. Many sectors affected by Covid and RBI made decisions, he said, we can restructure but not give up everything. RBI made a wise decision of ‘eligibility criteria’ vis-a-vis Non-NPA Accounts ….. all imaginable sectors affected by Covid19 have been taken into account, “he argued.
The law enforcement officer then told the court that banks were fully authorized to customize relief for not-so-large and large borrowers (loans up to Rs 1,500 million and more than Rs 1,500 million, respectively).
“The big outlines and parameters will be set by the RBI, the minutes will be set by the Kamath Committee and the banks will implement them,” argued SG.
On the issue of the implications of the Disaster Management Law of 2005, the Attorney General informed the Court that the effect of this disaster (Covid19) was of such a nature that it could not be treated by a ministry. “All written decisions are made with approval and the initiation of decisions under the Act is taken by the Prime Minister, who is the Chairman of the NDMA … all ministries are required to function under sections 35 and 37 of the Law”. argument.
Senior lawyer VV Giri appeared for the Reserve Bank of India, arguing that the prudential framework was available in terms of the RBI Circulars.
He argued today that the discretion to frame a resolution plan should rest with the bank and not the borrower.
The bank is expected to continue the hearing tomorrow.
Full audience updates are available here.
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