SC rejects request for relief from moratorium on Bank NPAs
The Supreme Court on Friday rejected the request for a moratorium on the declaration of accounts as non-productive assets (NPA) until June 23, she announced. The court said it was a matter of policy and did not consider it an “appropriate case” for intervention. In June, the SC rejected a plea to seek further relief from the loan moratorium, which was put in place due to the start of the second pandemic wave of COVID-19. The court asserted that such decisions with financial ramifications are best left to the decision makers, namely the government and the Reserve Bank of India.
A bench composed of judges Ashok Bhushan and Mukeshkumar Rasikbhai Shah rejected a PIL filed by lawyer Vishal Tiwari on Friday, July 2. June.
The Supreme Court clarified that it also had other pressing issues to deal with, such as vaccinations, issues related to migrant workers, etc. The tribunal also added that these matters fall within the purview of the government and the RBI as policy makers to assess situations and take appropriate action.
On March 23, the Supreme Court ruled out banks from charging interest on interest during the six-month loan moratorium period that was set from March 1 to August 1, 2020. That done, however, the court refused to put an extension of the moratorium period on loans beyond the period from March to August. This was done because the court felt that these types of changes were best left in the hands of the decision makers.
The judiciary then overturned a September 3, 2020 stay order that prevented lenders from declaring loan accounts that were not classified as such prior to August 31, 2020 as NPAs. That said, the judiciary and court expressed to on several occasions their anxiety about the struggle. borrowers from different sectors who have been hit hard by the pandemic. Sectors like real estate and electricity have been among the most affected.
The court was of the opinion that if he were to change the outline of the moratorium and give all borrowers full interest relief, it would “break the bank”, so to speak. This course of action would most likely jeopardize the banking system and drain all funds according to the RBI.
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