With the government stating it was considering concerns of borrowers on account of the Covid situation at “the highest level”, the Supreme Court on Thursday extended till further orders its interim direction against declaring defaulting accounts as NPAs and gave the Centre two more weeks time to apprise it of the decisions taken to address the issues.
On September 3, the apex court had directed that accounts which have not been declared as non-performing assets (NPAs) till August 31 should not be declared so till further orders.
Appearing for the Centre, Solicitor General Tushar Mehta told a Bench headed by Justice Ashok Bhushan — which is hearing pleas seeking waiver of interest on interest on loan repayments for the moratorium period and various other reliefs — that “Government of India on the highest level is considering all issues which have been raised in this batch of cases”.
He added the Centre is “considering all issues in consultation with Reserve Bank of India (RBI) as well as other banks and within a period of two weeks, appropriate decision will be taken with regard to the issues, which have arisen” in the matter “and the manner and mechanism of extending benefit to different sectors”.
Mehta sought two weeks from the court to file “appropriate affidavit, bringing on record the relevant decisions and directions of the Government of India as well as Reserve Bank of India”. Senior counsel V Giri, appearing for the RBI, also took a similar stand.
Allowing the request, the Bench, also comprising Justices R Subhash Reddy and MR Shah, said “all decisions taken by the Government of India, Reserve Bank of India or the different banks should be placed before the Court for consideration”. Making it clear that it will not grant any further adjournment, the Bench added that “on the next date of hearing, the specific instructions with regard to charging of compound interest and credit rating/downgrading during Moratorium Period shall be obtained, so that appropriate order be issued …”.
The bench will hear the matter next on September 28.
Appearing for realtors’ association Credai, senior advocate Kapil Sibal said that that downgrading of borrowers was being done despite an RBI circular against this.
Giri the said downgrading is being done on an individual basis and as per existing norms and urged the court to defer it by two weeks saying all issues are being considered.
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