The Supreme Court on November 27 heard petitions seeking interest waiver during the loan moratorium period.
The bench comprising of Justices Ashok Bhushan, R Subhash Reddy and MR Shah will resume hearing the matter on December 2, when it will most likely conclude the hearing.
Solicitor General Tushar Mehta to SC:
> If you go sector wise it would be beneficial. There is a mechanism in place let the petitioners work out in according to the mechanism. This is in background of the current situation keeping in mind the future contingency. (Inputs from Bar & Bench)
> It is now upto each individuals to figure of their restructuring plans.
> As per the economic state, various factors come into play for the government to decide on fiscal issue.
Senior advocate Harish Salve for Indian Banks' Association (IBA) to SC:
> Restraining order on banks qua classifying accounts as NPA should be vacated. Banks are rendered helpless against defaulting borrowers. (Inputs from Bar & Bench)
Senior advocate Kapil Sibal for CREDAI to SC:
> The Centre and RBI as well as bankers association has said everything needs to be worked out in accordance of the contract. This means disaster or no disaster contractual provisions will prevail. (Inputs from Bar & Bench)
> The position is that contractual provisions will prevail with or without Covid. As on September 1, 98 percent of the industry will become NPA. These are figures of the government. If court does not protect us, we will not be entitled to any relief.
Advocate Manoj V George for Contract Carriage Association to SC:
> Seek relief since Atmabirbhar Bharat scheme will not be applicable to people who own small buses and carts. (Inputs from Bar & Bench)
Senior Advocate Ravindra Shrivastava:
> The Disaster Management Act (DMA) states that when there is a disaster of severe magnitudes then there is relief in loans and loans are granted to one's affected by the disaster. (Inputs from Bar & Bench)
Here's what happened previously:
> The Reserve Bank of India (RBI) had in March 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.
>The SC had on September 3 instructed banks not to declare accounts as non-performing assets (NPAs) until further orders.
> The Centre in October said that it would 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.
> The top court had on November 19 directed Centre and RBI to reply to suggestions put forth before the bench. The SC also 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.