New Delhi: The Supreme Court Monday asked the Centre and the RBI to place on record the K V Kamath committee recommendation on debt restructuring due to COVID-19 related stress on various sectors as also the notifications and circulars issued by them so far on the issue of loan moratorium.
The apex court's direction came after the Finance Ministry decided to grant relief to individual borrowers as well as medium and small industries by agreeing to waive compound interest (interest on interest) charged on loans of up to Rs 2 crores for a six-month moratorium period announced due to the pandemic.
A bench comprising Justices Ashok Bhushan, R Subhash Reddy and M R Shah took up the pleas alleging that banks have decided to charge interest on the EMIs which have not been paid by the borrowers from March one to August 31 after taking benefit of the loan moratorium scheme of the Reserve Bank of India (RBI).
In the hearing conducted through video conferencing, the top court took note of the grievances that various sectors such as real estate have been left out under the new proposal by the Centre.
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The Kamath panel had made recommendations for 26 sectors that could be factored by lending institutions while finalizing loan resolution plans and had said that banks could adopt a graded approach based on the severity of the coronavirus pandemic in a sector.
The apex court has asked the Centre and the RBI to place before it within a week the recommendations and the decisions and other notifications on loan moratorium and also "consider the issues raised by the real estate associations and the power producers".
Meanwhile, Indian Banks Association (IBA), Confederation of Real Estate Developers Association (CREDAI) and other parties have been granted liberty by the bench to file their responses to the affidavit of the Centre.
Senior advocate C A Sundaram, appearing for the real estate sector, said it has been completely left out which should not have been done "in this kind of scenario".
Another senior lawyer Kapil Sibal said that he wanted to file a detailed affidavit to the Centre's reply as there are certain facts which need to be dealt with and sought time for it.
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The government, in its affidavit, had said that it will seek due authorisation from Parliament for making appropriate grants in this regard and "the endeavour shall be over and above the support of Rs 3.7 lakh crore to MSMEs, Rs 70,000 crore for home loans etc. already extended through the Garib Kalyan and Aatma Nirbhar packages announced by government earlier".
It had said that the relief to all borrowers in respect of compounding of interest during the period of moratorium would be admissible to the categories specified irrespective of whether the borrowers had availed the moratorium or not.
Initially, the RBI on March 27 had issued the 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.
(PTI Report)
