Loan Moratorium News: SC urges Center and RBI to submit proposals from the Kamath Panel and their loan moratorium decisions | India business news

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NEW DELHI: The Supreme Court on Monday called on the Center and the Reserve Bank of India (RBI) to review the KV Kamath Committee’s recommendation on debt restructuring due to COVID-19-related stress in various sectors, as well as the notices and circulars from them so far on the question of the loan moratorium.
The order of the Supreme Court came after the Treasury Department decided to provide relief to individual borrowers and medium and small industries by agreeing to waive compound interest (interest) on loans of up to Rs.2 billion for a six-month moratorium period announced the pandemic.
A bank made up of Judges Ashok Bhushan, R. Subhash Reddy and MR Shah took up the pleas, claiming the banks had decided to charge interest on the EMIs used by borrowers from March 1 to 31 of the RBI .
In the videoconferencing hearing, the Supreme Court took note of the complaints that various sectors, such as real estate, had been excluded from the Centre’s new proposal.
The Kamath panel had made recommendations for 26 sectors that could be considered by lending institutions in finalizing loan settlement plans and had stated that banks could take a tiered approach based on the severity of the coronavirus pandemic in a sector.
The top court has asked the center and the RBI to submit the recommendations and decisions and other notices on the credit moratorium within a week and also “to take into account the questions raised by the real estate associations and the electricity producers”.
Meanwhile, the Indian Banks Association (IBA), Confederation of Real Estate Developers Association (CREDAI), and other parties have been given the freedom by the bank to submit their responses to the centre’s affidavit.
Senior attorney CA Sundaram, who served on the real estate sector, said it had been left out entirely, which should not have been done “in this type of scenario”.
Another senior lawyer, Kapil Sibal, said he wanted to file a detailed affidavit on the centre’s response as there were certain facts that needed to be addressed and was seeking time to do so.
The government had stated in its affidavit that it would seek appropriate parliamentary approval for appropriate grants in this regard and that “the effort would go beyond support of 3.7 million rupees for MSMEs, 70,000 billion rupees for home loans, and so on target”. . already extended by the Garib Kalyan and Aatma Nirbhar packages announced by the government ”.
It had stated that the compounding of interest relief for all borrowers during the moratorium was permissible for the specified categories, regardless of whether the borrowers had taken advantage of the moratorium or not.
Originally, the RBI issued the circular on March 27th, which allowed credit institutions to stop paying installments of fixed-term loans due between March 1st, 2020 and May 31st of this year due to the pandemic.
The moratorium was later extended to August 31.
Consider Credit moratorium: Supreme Court postpones hearing until October 13th
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