Interest During Loan Moratorium : Live Updates From SC Hearing

Vishwanathan: This calls for adopting "Doctrine of Proportionality while balancing Force Majeure" for both parties. 

Vishwanathan telling the court that Power Producers Association is most stressed sector. Extraordinary situation which has operated as a Force Majeure. 

Vishwanathan: I will make submissions to to the tune of Union being obliged to act because of extraordinary situation under DMA and how Your Lordships are empowered to act. This is not an ordinary situation of banking transaction. World has never seen this before.

Senior Advocate Vishwanathan for CREDAI Maharashtra & Association of Power Producers: Relief prayed is to the tune of Levy of interest for the period of moratorium should be proportionate that the banks have to pay to depositors and charges basis the doctrine of proportionality.

Sundaram: Everything is left without guidelines, to the individual banks. The whole aim is for all of us to survive. Thats all I can appeal to your lordships.

Sundaram: I am only saying that the RBI does have the power to regulate this. The interest can be turned into a term loan. We are a very specific industry (Real Estate). I can only give suggestions.

Sundaram: There is so much “grey” in the RBI’s affidavit.

Sundaram: There is a contradiction here, they also say RBI shall constitute committee which shall recommend financial parameters. But they say that only loans by “big borrowers” shall be decided by them

Sundaram: “Lending institutions shall frame its own Viable resolution plan for eligible borrowers,” their affidavit says. 

Sundaram: Even if interest is going to be paid, at least reduce the interest to the rate at which the banks give depositors interest, otherwise we’re all going to become NPA’s.

Under DMA, even the RBI has left it to banks on the haircut on interest.