by Dhruva Prasad
Dismissing petitions of satisfied petitioners, the apex court asked the RBI and the Centre to respond to suggestions
The three-judge bench of the Supreme Court disposed the petitions of those who were satisfied with the compound interest waiver in the loan moratorium and loan waiver case. The apex court asked power generation companies and other petitioners to file their suggestions before Reserve Bank of India (RBI) counsels and asked the Centre and the central bank to respond.
The bench had heard a PIL on October 5 by petitioners seeking an extension of the August 31 deadline for the loan moratorium period announced by the RBI in March.
Senior advocate and Congress leader Abhishek Manu Singhvi was representing power companies. He contended that his clients were saddled with unpaid dues, to the tune of 1.2 lakh crore rupees. He said that the RBI’s circular on the loan-waiver inadvertently discriminated against them by not allowing loan-restructuring.
After the period lapsed, the Supreme Court had ordered banks not to declare loans as NPAs until further instructions. On October 2, the Centre had agreed to waive-off interest payments on loans of only up to Rs. 2 crores in a bid to provide relief to individual borrowers and MSMEs.
The Centre urged a bench of Justices Ashok Bhushan, MR Shah and Subhash Reddy to not intervene and provide further relief to borrowers under Article 32 as the Government was already “on top of it”.
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— Live Law (@LiveLawIndia) November 19, 2020
The RBI has held that loan waivers would cost lenders 2 lakh crore rupees, and would adversely impact the financial health of banks.
(Inputs: Live Law, Bar & Bench, Moneycontrol.com)