The Supreme Court on Thursday passed an interim order saying that the loan accounts under moratorium till August 31 shall not be classified as non -performing assets till further notice. A bench of Justices Ashok Bhushan, R Subhash Reddy was hearing a batch of petitions seeking interest waiver on loan moratorium granted by RBI citing the financial constraints faced by the borrowers due to COVID-19 pandemic.
“No account should be declared NPA for two months and the banks should not take action against borrowers which is coercive. We have to protect them,” the top court said referring to accounts not declared as NPA till August 31.
“The main grievance of the petitioners is that they have not been given adequate relief and the NDMA under the Disaster Management Act (DMA) has not been active to give relief,” the bench observed.
Solicitor General Tushar Mehta, representing the Centre and RBI, opposed the plea saying “The idea of the moratorium was to defer repayment to ease the burden caused by COVID and lockdown so that business can manage working capital. The idea was not to waive off interest.”
“The banking sector is the backbone of our economy, we can’t take any decision which can weaken the economy,” he added.
Lawyer Harish Salve. who was appearing on behalf of the Indian Banks Association said, Common man’s problems are different from those of the corporates. If kind of borrowers and the type of borrowing is identified then specified relief can be provided. Individual and industrial problems need to be addressed differently.
On August 26, the apex court had asked the Centre to reply within a week on the issue of interest being charged on instalments which have been deferred during the moratorium period.
The top court had earlier asked the Centre and the RBI to review the move to charge interest on deferred EMIs during the moratorium period.