The Supreme Court (SC) on Monday asked the Centre and the Reserve Bank of India (RBI) what follow-up action has been taken on proposals of the K V Kamath committee, set up to suggest financial parameters to be considered for one-time restructuring of loans impacted by the Covid -19 pandemic.
“There is nothing in your affidavit which says what has been done with regard to the Kamath Committee report. There has to be something on record,” Justice M R Shah, sharing a Bench with Justice Ashok Bhushan and Justice R Subhash Reddy told Solicitor General Tushar Mehta, while hearing a petition which raised the question of charging of interest on interest for loans during the moratorium period.
The court was referring to the affidavit filed by the Union Finance Ministry, which said the government had decided to waive off interest on interest with respect to Micro, Small and Medium Enterprises (MSMEs) and other personal loans of up to Rs 2 crore during the six-month moratorium period.
Mehta, who appeared for the Centre, said he would put the report on record. He added it was in the public domain and there was nothing to hide in it.
Senior Advocate V Giri, who appeared for the RBI, said some discussions have taken place at the highest level and the government has been deliberating upon it.
The senior counsel said there were further recommendations to be made and they would be considered. He also agreed to place the report on record if the court wanted.
“It’s not about placing the report on record but about implementing it. These are not suggestions which could not have been implemented. The RBI and government has to issue some order so that people know what benefit has been extended,” remarked Justice Bhushan.
Giri sought to assure the court that it will be done.
“When? This has been going on for so long. You are saying it will be done … but when?” asked Justice Shah.
He added it has to be converted into a proper restructuring scheme. “There are so many poor,” Justice Shah remarked.
Senior Advocate Harish Salve, who appeared for the Indian Banks Association, said the delay is hurting banks.
Adjourning the matter for a week to enable the petitioner to reply to the government affidavit, the court said the affidavit of the Centre did not have all the necessary details regarding the questions asked by it earlier and asked Mehta to file an additional affidavit.
The court will now hear it on October 13.
The government, in its affidavit, said a complete waiver of interest for loan repayments during the moratorium period would affect the very survival of banks and create problems for depositors, hence it was limiting the relief to borrowings up to Rs 2 crore for MSMEs and personal loans.
The Kamath committee has recommended to take into account five specific financial ratios and sector-specific thresholds for each ratio in respect of 26 sectors while finalising the resolution plans.
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