Debtors choosing decision of COVID-related burdened loans not required to submit particular plans: RBI to SC

Tribune News Service

New Delhi, December 14

Borrowers opting for resolution of COVID-related stressed loans shall not be required to submit any specific plans, the RBI has told the Supreme Court.

In an affidavit filed in the top court, the banking sector regulator said that the specific contours of the resolution plan to be implemented might be decided by the lending institutions in consultation with the borrowers.

“The Resolution Framework does not require any resolution plan in any form to be submitted to the lending institutions at the time of request for invocation. Rather, for invocation, the borrowers are required to merely submit a request to the lending institutions for being considered under the Resolution Framework,” it submitted.

A Bench headed by Justice Ashok Bhushan – which heard issues relating to various sectors of trade and industry affected by COVID-19 pandemic – would take up the matter on Tuesday.

Earlier, the RBI had requested the Supreme Court to vacate its September 4 interim order restraining banks from classifying accounts into non-performing accounts.

“We are facing difficulty due to order banning declaring of NPAs,” senior advocate V Giri, representing RBI, had told the Bench.

Announced by 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.

Banks, financial and non-banking financial institutions have already credited into the accounts of eligible individual borrowers the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme period.

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