The RBI on Thursday called on the Supreme Court to overturn its restraining order, which found accounts opened by Jan.
As a relief for stressed borrowers who are in distress due to the effects of the COVID-19 pandemic, the Supreme Court issued the injunction on September 3.
The Reserve Bank of India (RBI) attorney informed a bank headed by Judge Ashok Bhushan, who heard a series of pleadings regarding banks charging interest on EMIs from borrowers who claim it took, failed to pay the credit moratorium in the face of the pandemic.
We are facing difficulties due to the order prohibiting the declaration of NPAs, Senior Advocate V Giri on behalf of RBI told the bank while urging the bank to lift the interim order.
The RBI and the Treasury Department have already submitted separate additional affidavits to the Supreme Court stating that banks, financial institutions and non-banks will be allowed up to Rs 2 crore up to 5 during the period of the moratorium.
Senior attorney Rajiv Dutta, who stood on behalf of one of the petitioners, told the bank that they were grateful to the center and RBI for holding small borrowers and said his plea would be dismissed.
The attorney appearing for the center said that attorney general Tushar Mehta, who has to argue on the matter, was on his feet in another case before a special bench of the Supreme Court.
Senior attorney AM Singhvi, who appeared on behalf of one of the applicants, said the energy sector needs to be heard.
The bank said it would bring the matter up for a hearing on November 18.
The pleas concerned the charging of interest on interest by banks for EMIs that were not paid by borrowers after the RBI loan moratorium had been invoked from March 1 to August 31.
Previously, the RBI had issued an affidavit that it has asked all banks, financial and non-bank financial institutions to take “necessary measures” to compensate the accounts of eligible borrowers for the difference between compound interest and simple interest on loans of up to. credit Rs 2 crore during the moratorium.
Previously, the central government had informed the Supreme Court that lenders had been asked to reduce the difference between compound interest and simple interest, which had been made during the RBI’s credit moratorium program by April 5th.
The government said the ministry had issued a plan for credit institutions to credit borrowers’ accounts with this amount for the six-month credit moratorium announced after the COVID-19 pandemic.
On October 14, the Supreme Court ruled that the center should implement the interest waiver on loans of up to Rs.2 billion as part of the RBI’s moratorium plan “as soon as possible” and declared that the common man’s Diwali would be in the In the hands of the government.
The RBI had issued the circular on March 27, which enabled credit institutions to grant a moratorium on the payment of installments of fixed-term loans due to the pandemic, due between March 1, 2020 and May 31, 2020. The moratorium was later extended to August 31 of this year.