Moratorium: RBI urges SC to lift order banning declaration of NPAs

Tribune News Service

New Delhi, November 5

The RBI on Thursday requested the Supreme Court to vacate its interim order restraining banks from classifying accounts into NPAs even as the hearing was deferred to November 18.

“We are facing difficulty due to order banning declaration of NPAs,” senior advocate V Giri told a Bench led by Justice Ashok Bhushan on behalf of the RBI.

In an affidavit, the RBI had last month said, “If the stay is not lifted immediately, it shall have huge implications for the banking system, apart from undermining the regulatory mandate of the RBI.”

As Solicitor General Tushar Mehta was busy in another court, the Bench deferred the hearing on petitions seeking waiver of “interest on interest” by banks on EMIs which were not paid by the borrowers who availed of the RBI loan moratorium scheme in view of the Covid pandemic.

Announced by the RBI in March for three months, the loan moratorium scheme was extended till August 31.

The RBI and the Finance Ministry have already told the court that the banks, financial and non-banking financial institutions will credit into the accounts of eligible borrowers by November 5 the difference between compound and simple interest collected on loans of up to Rs 2 crore during the moratorium scheme period.