Tribune News Service
New Delhi, November 27
The Indian Banks Association on Friday urged the Supreme Court to vacate the stay on classifying accounts as Non-Performing Assets (NPAs), contending that it has rendered banks helpless against defaulting various sectors demand concessions.
During hearing on PILs seeking relief for borrowers of various sectors, senior counsel Harish Salve told a Bench headed by Justice Ashok Bhushan that it should lift the stay ordered on September 4 restraining banks from classifying accounts into non-performing accounts.
Earlier, the RBI had in an affidavit filed in the top court said, “If the stay is not lifted immediately, it shall have huge implications for the banking system, apart from undermining the regulatory mandate of the Reserve Bank of India.”
The Bench disposed of PILs filed by individual borrowers after Solicitor General Tushar Mehta said eight categories of borrowers with loan up to Rs two crore had already been given benefit of the loan moratorium scheme. It directed the government to ensure that all necessary steps be taken to implement its decision to forego compound interest.
Mehta, however, said pre-COVID defaulters can’t benefit from the fresh resolution framework.
Announced by the RBI in March for three months, the loan moratorium is a legal authorisation to debtors to postpone payment of EMIs. It was extended to six months till August 31, 2020. The government said more than 50 per cent of the borrowers didn’t avail of the moratorium.
Even after disposal of individual PILs, there are several petitions filed by various sectors of the economy seeking similar relief from the government on accounts COVID19.
On all such petitions, the Bench adjourned the hearing to next week and asked the power producers to give suggestions on loan relief to the RBI.
The court noted that the pandemic has not only caused serious threat to the health of the people but has also cast its shadow on the economic growth of the country as well as other countries in the entire world.