The Supreme Court bench of Justices Ashok Bhushan, R. Subhash Reddy and M.R. Shah on Wednesday heard the loan moratorium case arguments. The hearing will continue on Thursday.
Senior Advocate Harish Salve, who appeared for the Indian Banks Association, said the Disaster Management Act creates an architecture for governmental action in matters of disasters, both prevention and mitigation. It is inclusive and exclusive, he said. Salve said the resolution has to be a restructuring of a debt. Normally, for a private bank norms are laid by them. SBI has a majority shareholding from the government but it’s a listed company.
Senior Advocate Giri resumed submissions for the RBI. He said not a single instance of an apathetic lender could be found. When Justice Shah asked, When there is a specific provision under Section 13, then what? That’s okay, sectors have to be considered. SG Tushar Mehta replied that the government has stated for good reasons it’s not possible for us under Section 13.
The Centre in October had said that it would waive compound interest on the repayment of loans of up to Rs 2 crore in some categories, a move that would provide relief to individual and MSME borrowers. The top court had on November 19 disposed of petitions in which the petitioners were satisfied with compound interest waiver.
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Senior Advocate Giri had said the plea for extending moratorium is not viable. The Court had previously said there is “no merit in charging interest on interest”. The RBI had on June 4 said lenders will lose Rs 2 lakh crore if interest is waived completely during the moratorium period.