Loan Moratorium Case: SC extends NPA relief to bank accounts; final hearing on Sep 28

In a massive relief to bank account holders, the Supreme Court bench headed by Justices Ashok Bhushan and comprising R Subhash Reddy and MR Shah on Thursday extended its interim loan moratorium order till further orders, after granting Centre and RBI two weeks to file affidavits. Warning the Centre that the matter would not be adjourned further, the SC posted the matter for September 28. Previously, SC had ruled that accounts not termed as Non-Performing Asset (NPA) till August 31 will not be declared as NPA till the case is concluded.

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SC extends interim order

SC asks Centre to file detailed affidavit on pleas seeking moratorium extension

Centre to constitute expert panel

In its argument, Solicitor General Tushar Mehta said an expert panel has been set up to look into the issue of interest being charged by banks on instalments deferred during the moratorium period due to the COVID-19 pandemic. He also said appropriate decision will be taken with regard to the problems faced by different sectors considering all issues raised in the batch of petitions and within two weeks. Petitioners had sought to waive off interest on interest during the loan moratorium period granted by the RBI due to financial decline amid the pandemic.

A PIL submitted by one of the petitioners, Advocate Vishal Tiwari sought relief to the individual borrowers and service sectors, besides big manufacturing sectors. It stated that till further SC orders, borrowers' CIBIL score shall not be affected and no coercive action shall be taken against borrowers till further orders. Senior advocate Rajeev Dutta, who was representing a set of borrowers, told the apex court that the compound interest is still being charged in loan cases.

Loan moratorium case: SC says 'no bank account to be declared as NPA' till plea disposed

RBI on COVID moratorium

The RBI has already informed SC that repayment of loans allowed during the coronavirus crisis can be extended by two years. Amid the COVID-19 pandemic, the RBI had allowed banks and other financial institutions to offer a six-month moratorium to all existing individual and corporate term loan borrowers until August 31. Finance Minister Nirmala Sitharaman too has asked bankers to roll out loan resolution schemes by September 15 adding that COVID-19 related distress must not impact their assessment of borrowers' creditworthiness.

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(With PTI Inputs)