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SC on Loan Moratorium LIVE Updates | Supreme Court defers hearing later today
SC on Loan Moratorium LIVE: A bench led by Justice Ashok Bhushan is hearing pleas seeking waiver of accruing interest during the six-month loan moratorium period
SC on Loan Moratorium LIVE: The Supreme Court is set to resume it hearing on a batch of petitions seeking interest waiver during the loan moratorium period on October 13 (today). The hearing will begin at 12 noon, as per CNBC-TV18. A bench led by Justice Ashok Bhushan and comprising Justices R Subhash Reddy and MR Shah on October 5 heard pleas seeking waiver of accruing interest during the six-month loan moratorium period. The apex court granted Centre and the Reserve Bank of India (RBI) time to file additional affidavits which are likely be addressed today. The SC had on September 3 instructed banks not to declare accounts as non-performing assets (NPAs) until further orders after the Centre on October 2 told the apex court that it would waive compound interest on the repayment of loans of up to Rs 2 crore, a move that would provide relief to individual and micro, small and medium enterprise (MSME) borrowers. The SC has previously said there is "no merit in charging interest on interest".
The RBI had in March announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The move was intended to provide borrowers relief during the COVID-19 pandemic and expected to give them more time to clear payments of EMIs amid the economic fallout of the lockdown, without being classified as NPAs. On June 4, the central bank said lenders will lose Rs 2 lakh crore if interest is waived during the moratorium period. In its annual report, the central bank also said the moratorium on loan repayments could have an impact on the financial health of banks. Catch the latest updates here:Top
highlights
Case hearing at "end of board"
Loan moratorium case so far
SC observations on October 5
SC on Loan Moratorium | The 3-bench of Justices Ashok Bhushan, R. Subhash Reddy & MR Shah assembled at 12 noon. Bench announces that the matter will be taken up at the end of board (i.e. after all other cases in the list have been heard). (LiveLaw)
JUST IN | The Bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah will take up the case for hearing at end of the board (Bar & bench)
SC has "passed over" the interest waiver case. Now will be taken up later today: CNBC-TV18
SC on Loan Moratorium | Going any further from relief announced would be detrimental to economy, Centre tells SC
The Centre has told the Supreme Court that going any further than the fiscal policy decisions already taken, such as waiver of compound interest charged on loans of up to Rs 2 crore for six months moratorium period, may be "detrimental" to the overall economic scenario, the national economy and banks may not take "inevitable financial constraints".
The Union Finance Ministry, through its additional secretary Pankaj Jain, filed the affidavit in compliance of the top court's October 5 order asking it to place on record the K V Kamath Committee recommendations on debt restructuring in view of COVID-19 related stress on various sectors as well as the notifications and circulars issued so far on the loan moratorium and financial difficulties. Read more here
SC on Loan Moratorium | Supreme Court will resume its hearing on the batch of petitions seeking relief in the form of extension of moratorium period beyond six months or waiver of interest on interest.
> The RBI in its latest affidavit before the SC has said that a further extension of moratorium beyond six months is unsustainable. The central bank also urged the SC to vacate the stay given on Banks from classifying loan accounts as NPAs.
> Centre had earlier agreed to waive compounded interest for loans up to Rs 2 crore and undertook to bear the economic burden caused by it. In the latest affidavit, Centre said that questions of financial stress management cannot be decided judicially.
(Bar & Bench)
SC on Loan Moratorium | Full proccedings on October 5
SC Hearing on Loan Moratorium Highlights | A bench led by Justice Ashok Bhushan heard pleas seeking waiver of accruing interest during the six-month loan moratorium period.
SC on Loan Moratorium | Supreme Court to consider Interest Waiver Case at 12 noon: CNBC-TV18
SC on Loan Moratorium | The case so far
The RBI had in March announced a moratorium on repayment of term deposits for three months, which was later extended till August 31. The move was intended to provide borrowers relief during the COVID-19 pandemic and expected to give them more time to clear payments of EMIs amid the economic fallout of the lockdown, without being classified as NPAs.
The SC had on September 3 instructed banks not to declare accounts as non-performing assets (NPAs) until further orders after the Centre on October 2 told the apex court that it would waive compound interest on the repayment of loans of up to Rs 2 crore, a move that would provide relief to individual and MSME borrowers.
The SC has previously said there is "no merit in charging interest on interest".
The RBI had on June 4 said lenders will lose Rs 2 lakh crore if interest is waived during the moratorium period. In its annual report, the central bank also said the moratorium on loan repayments could have an impact on the financial health of banks.
SC on Loan Moratorium | Senior advocate Harish Salve, appearing for banks, to SC on October 5: "Our accounting frozen because SC Has restrained us from classification of accounts as NPAs. Will need 48 hours to get back to the court on the government's proposal". (CNBCTV-18)
The Government has a two pronged approach. It has allowed relief to small borrowers by fiscal support for interest on interest. The Kamath Committee recommendations take care of sectoral issues.
SC on Loan Moratorium | Senior Advocate V Giri, appearing for RBI, to SC on October 5: "A large percent of people feel that an interest on interest is hitting them very hard. There are further recommendations to be made, and they will be considered. If you feel the report is to be placed on record, we will do so." (LiveLaw)
Kamath Committee was constituted by the RBI. At the highest level, certain discussions have taken place, even during the hearing of writ petitions. This was also a statutory amendment and for circulars to be issued to the higher institutions.
SC on Loan Moratorium | Senior Advocate Kapil Sibal to SC on October 5: The issues are far more grave, because as on September 1, all our accounts are "non standard". (Bar & Bench)