SC protect accounts, which were not declared NPA till Aug 31
PrintListen to this Article
A bench headed by Justice Ashok Bhushan said this while hearing a batch of pleas which have raised the issue of interest being charged on instalments which were deferred under moratorium period due to COVID-19 pandemic.
The apex court passed the order while noting the submissions of senior lawyer Harish Salve, who appeared for banks' association and said that no account shall become NPA at least for a period of two months .
In view of the above, the accounts which were not declared NPA till August 31, 2020 shall not be declared NPA till further orders, said the bench, also comprising Justices R S Reddy and M R Shah.
Solicitor General Tushar Mehta, who appeared for the Centre and the Reserve Bank of India (RBI), said that banking sector is the backbone of the economy and every sector and every economy is under stress due to the pandemic.
Mehta said it is an accepted position worldwide that waiving off interest is not a good option for revival of economy.
While referring to the grievance raised by the petitioners, the bench said, We are concerned with interest on the interest .
The arguments in the matter remained inconclusive and would continue on September 10.
The Centre had recently told the apex court that waiver of interest on deferred EMIs during the moratorium period would be against the basic canons of finance and unfair to those who repaid loans as per schedule.
Reserve Bank of India has however come out with a scheme which provides for extension of moratorium for two years to certain stressed borrowers, the Centre had informed the top court.
The Ministry of Finance had filed an affidavit before the apex court, which had earlier asked the Centre and the RBI to review the move to charge interest on EMIs and interest on the interest during the moratorium period introduced under the scheme due to COVID-19 pandemic.
The solicitor general had told the bench that moratorium period on repayment of loans amid the pandemic is extendable by two years.
The pleas filed in the apex court have raised issue pertaining to validity of March 27 circular of the RBI which allowed lending institutions to grant moratorium on payment of instalments of term loans falling due between March 1, 2020 and May 31 this year due to the pandemic. Later, the period of moratorium was extended till August 31. #casansaar (Source - PTI)
Category : NPA | Comments : 0 | Hits : 540
Indian banks have written off loans worth Rs 1.53 lakh crore in 2020-21 to show reduced non-performing assets (NPAs) on their books, calculations based on numbers released by individual banks showed. This is the second-highest amount of loans being written off in a financial year over the last decade after 2018-19's record Rs 2.54 lakh crore write-offs. For one, loans that have been bad for years are dropped from the balance sheet of banks by way of a write-off and corporates compri...
The Supreme Court on Tuesday said the interim relief granted earlier to not declare the accounts of respective borrowers as non-performing assets stands vacated, ending the blanket ban on classification of non-performing assets (NPAs). “However, there shall be no order as to costs,” the order by the top court said. In September last year, the Supreme Court had directed that accounts not declared NPAs as of August 31 should not be classified as such until further orders. This ha...
The Finance Ministry has asked the Reserve Bank of India (RBI) to relax asset classification norms for farm loans extended by banks following the stress faced by the agriculture sector. In a letter addressed to RBI Governor Shaktikanta Das, the Ministry said, “it is requested to consider making appropriate relaxation in asset classification norms in respect of short-term agricultural crop loans for a period up to 30th June 2020.” The letter, reviewed by The Hindu, cited a commu...
Public sector banks (PSBs) have recovered close to Rs 1.2 lakh crore from stressed assets during the financial ended March, primarily helped by resolution under the Insolvency and Bankruptcy Code (IBC), an official said. During the first half of the previous fiscal, banks recovered Rs 60,713 crore from bad loans. "Due to non-resolution of some big accounts referred under NCLT (National Company Law Tribunal), PSBs could not achieve the resolution target of Rs 1.80 lakh crore. But, thes...
The National Company Law Appellate Tribunal (NCLAT) on May 2 allowed the banks to declare as non-performing assets the accounts of IL&FS and its group companies that have defaulted on payments. A bench headed by Chairman Justice S J Mukhopadhaya lifted the embargo on the banks to declare the accounts of the debt-ridden IL&FS and its 300 group entities, which are unable to pay their debt. However, the appellate tribunal has also clarified that although the banks would declare the IL...
Comments