With the fresh surge of Covid infections and the resultant lockdowns across several states, industry and other commercial activity is again grounding to a halt, just like during the first phase of the pandemic and the ensuing lockdown. This has again given rise to situations of loan defaults and creation of further NPAs
As a sort of pre-emptive measure, a petition has been filed in the Supreme Court through Advocate Vishal Tiwari, seeking directions for relief to borrowers in the form of a fresh loan moratorium. The plea asks for extension of time period under the restructuring scheme and also wants a temporary cessation of the declaration of NPAs by banks and other financial organisations. This, says the plea, will bring relief to the public at large in the wake of the pandemic. The petition seeks directions from the court towards effective and remedial measures to redress and overcome the financial stress and hardship faced by the borrowers of the country during the second wave of Covid-19 and the lockdowns.
The petition said that the Central Government and its concerned ministries along with the Reserve Bank of India has failed to bring in any sound relief in this present situation for all those stressed sectors and individuals for whom sustenance and existence has been a question.
The petition further said that no monetary relief and packages has been declared by the sovereign in this stressed time and people are under tremendous pressure to maintain the EMIs and is always under the threat of accounts being declared NPA.Advocate Vishal Tiwari has urged the court to direct that no bank or financial institution will take action for auction in respect of any property of any citizen or person or party or any body corporate for a period of six months.
The advocate said that no account should be declared as non performing asset for a period of six months.
According to the petitioner, the circular issued by the RBI on May 6, 2021 for resolution plan 2.0, cannot be said to be adequate relief to all in the present circumstances being arbitrary, unfair and just an eyewash.
The petition has sought directions to the respondents to permit the lending institutions to grant interest-free moratorium period for term loan and defer the payment of loan instalments for a period of six months or till Situation from COVID 19 Normalizes.
“Such non-action and reluctance on the part of the Respondents have violated the fundamental rights of livelihood and dignity and therefore requires the immediate intervention of this Court in the interest of public justice,” the Petition said.
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The Petitioner has made the following suggestions:‐
- Property Taxes, fines and penalties should be waived during all lockdown periods
- Have paid salaries last lockdown by taking the ECLG loans and requests that staff salaries be paid via direct transfer
- Moratorium should be given for at least 2 years – without interest piling up – pause it completely although after the first lockdown principal amount went up substantially with huge compound interest such should not be imposed this time.
- ECLG loans be given again, rents, electricity and phone bills also needs to be disbursed.
- Vaccination drives need to be immediately increased with the compliance to Covid protocols.