"Interim Order Posing Difficulties": RBI Tells SC While Seeking Lifting Of Restrictions On Declaration Of Accounts As NPAs In Loan Moratorium Plea's

The Reserve Bank of India (RBI) informed the Supreme Court today that it was seeking lifting of restrictions imposed by the Supreme Court whereby it, protected those accounts from being declared as Non-performing Assets (NPAs), which were not classified as NPAs on August 31.

Senior Advocate VV Giri who appeared for the RBI told the Court that the Top Court must hear the RBI's stand on the next date of hearing.

"The Interim Order imposed by My Lords is causing great difficulties for the RBI. My lords may kindly hear us on the next date," he said.

A bench of Justices Ashok Bhushan, MR Shah and Subhash Reddy adjourned the plea(s) seeking extension of the Covid19 induced loan moratorium & waiver of accruing interest upon request of the Solicitor General's office, which informed the Court that the Law Officer was on his legs in a part heard matter (Central Vista).

When the hearing began, Senior Advocate Rajiv Dutta appeared for individual borrowers and expressed his gratitude for the Scheme Of Waiver Of 'Interest On Interest' For Eligible Borrowers.

The Central Government had filed an affidavit stating that the Ministry of Finance had approved the policy decision for granting various reliefs for Covid pandemic, including a policy decision whereby waiver of interest on interest would be effectuated for eligible borrowers of loans up to Rs. 2 Crore. This scheme comes into force today, i.e. November 5.

"I am extremely grateful to the Union of India, Ministry of Finance & RBI for holding the hands of small borrowers. My lords may kindly dispose of my writ today," said Dutta.

Senior Advocate Abhishek Manu Singhvi appearing for Power Producers Association said that he was seeking 5 minutes to argue today. However, the bench said that since it was adjourning the case, it will not hear any party.

The bench went on to adjourn the case for November 18 and granted liberty to parties to file short notes.

On October 14, the Bench had told the Centre that even though it had welcomed its decision of relieving the smaller borrowers, there was no reason to delay the implementation of the said decision.

"Their Diwali Is In Your Hands, Mr. Mehta," the bench had told the Solicitor General.

The law officer had then informed the bench that there was diversity in lending and different modalities are required to be followed. "Consultations are on between the required stakeholders," he added.

Bench then went on to indicate that they will take up the case on November 2 and that, it expected the Government to tell the top court about the implementation of the aforesaid benefits.

On November 2, the bench had adjourned the petitions for today.

The affidavits which have come on record have been filed in response to a batch of pleas in the apex court, raising issues pertaining to validity of RBI's March 27 circular which allowed lending institutions to grant moratorium on payment of instalments of term loans falling due between March 1, 2020 and May 31 this year due to the pandemic.

Later, the period of moratorium was extended till August 31.