(Input from LiveLaw)
SC Hearing on Loan Moratorium Highlights: The RBI had in March announced a moratorium on repayment of term deposits, in a move intended to provide borrowers relief during the COVID-19 pandemic.
(Input from LiveLaw)
On Wednesday Senior advocate Kapil Sibal, appearing for CREDAI HR, said the "state of the economy states that there will be havoc by December 10, RBI is saying that the borrower & lender will decide among themselves.Their (Union) position today is that your lordships have no jurisdiction to go into this." (Input from LiveLaw)
The SC led by Justice Ashok Bhushansaid it will hearSolicitor General Tushar Mehtatoday, legal news website LiveLaw reported.
India must not neglect bank recap despite pandemic, says former RBI deputy governor Viral Acharya
India is neglecting bank recapitalisation as it focuses on debt moratoriums and interest waivers for borrowers amid the COVID-19 pandemic, a former central bank official told Reuters in October.
Indian banks are saddled with over $120 billion in bad debt, and in severely stressed conditions the bad-loan ratio could nearly double by March, according to Reserve Bank of India projections.
Banks seek extension of loan recast window till March 31: Report
Banks have requested an extension of restructuring window outlined by the KV Kamath committee, to March 31, 2021.
The Indian Banks' Association (IBA) has asked the Reserve Bank of India (RBI) tokeep the loan recast window openafter the current expiry on December 31, The Economic Times reported.
Very few of the borrowers have till date applied for restructuring and incrementally such borrowers are likely to be much lower, SBI said in a report on Wednesday.
“This is a notable climb-down from the base case scenario and it is largely a part of the humongous efforts of the banks to redesign the banker and corporate relationship since the unveiling of AQR,” the report said.
Subsequently, the big fear of large slippage in asset quality of banks is unfounded with Indian banks guiding at much lower credit cost than even their Asian counterparts, the report said.
Here's what happened so far:
> The SC had on September 3 instructed banks not to declare accounts as non-performing assets (NPAs) until further orders.
> The SC on November 19 disposed off petitions in which the petitioners are satisfied with compound interest waiver.
> The SC has previously said there is "no merit in charging interest on interest".
> The RBI had on June 4 said lenders will lose Rs 2 lakh crore if interest is waived completely during the moratorium period.
The Reserve Bank of India (RBI) had in March 2020 announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The move was intended to provide borrowers relief during the COVID-19 pandemic.
Since then, petitions have been filed in the Supreme Court seeking complete interest waiver during the six-month period of March 1 to August 31.
In October, The Centre agreed to waive compound interest on the repayment of loans of up to Rs 2 crore in some categories, a move that would provide relief to individual and MSME borrowers.
Read more the compound interest waiver
Good morning! The Supreme Court will today resume hearing petitions seeking interest waiver during the six-month loan moratorium period.
Stay tuned to this blog for LIVE updates.
