Accounts not declared NPAs as on August 31 should not be declared NPAs till further orders: Supreme Court
Supreme Court today asked the Government of India and the Reserve Bank of India (RBI) to take concrete decisions on the issue of sector-wise loan restructuring within two weeks.
A three-Judge Bench of Justices Ashok Bhushan, R Subhsash Reddy and MR Shah took up the case for hearing today.
Today, the Court was told by Solicitor General Tushar Mehta that various aspects of the issue were being considered by the Union Finance Ministry and the RBI in consultation with the banks. However, a period of two weeks more was required for the affidavit to be filed.
The Court asked the Centre to come up with concrete decisions on the issues.
Senior Counsel Kapil Sibal, appearing for real estate associations, highlighted before the Court that despite the Court’s interim order, there was credit downgrading taking place.
On the other hand, Senior Advocate Rajiv Dutta pointed out that a concrete declaration on the specific issue of interest on interest has to be made. Dutta said that while the decision of loan restructuring was a welcome one, it should have been done earlier. Dutta, who was representing the petitioner in the case, also said that the individual borrowers continue to suffer.
It was contended by Senior Advocate Aryama Sundaram that with the moratorium period ending on August 31, banks had begun debiting interest amount.
It was urged before the Court that borrowers need to be protected from coercive action.
Senior Advocate Mukul Rohatgi for State Bank of India and Senior Advocate Harish Salve for Indian Banks’ Association (IBA) also sought time to file replies in light of these new issues raised and prayers made on downgrading, among others.
The Court therefore, adjourned the hearing till September 28 while granting time to all the concerned parties to make their positions clear.
SG Tushar Mehta along with Senior Counsel V Giri, who also appeared for RBI, assured the Court that a holistic view of the subject would be taken and that all sectors would be considered. Mehta and Giri assured the Court of placing on record the decisions that the government and RBI take in this regard.
The interim order passed in the earlier hearing on non-declaration of loan accounts as Non-Performing Assets (NPAs) shall continue till further orders, the Court said.
The Court also specified that it will also consider all the other prayers made by the petitioners on the next date of hearing.