On Friday, the Apex Court issued notices to the Central Govt. and the Reserve Bank of India (RBI) on a petition seeking clarification whether all non-banking finance companies are eligible for loan moratorium or not.
The petition, filed by the Confederation of Real Estate Developers’ Associations of India (CREDAI), had sought clarification whether all non-banking finance companies are eligible for loan moratorium or whether banks have the discretion to give the benefit.
In March, the Reserve Bank of India issued a circular giving liberty to all banks and financial institutions to allow a moratorium of 3 months on the payment of instalments with respect to all term loans outstanding as on March 1, subject to borrower’s request.
Senior Counsel Harish Salve appearing for the Association submitted that despite the RBI’s circular, some Banks were refusing to grant this moratorium. Salve said that while the circular itself indicates that it is discretionary for the Banks to grant the moratorium, the RBI Governor’s speech on April 7 indicated that the circular had a binding effect on the Banks. This is where the problem lies and the same needs clarification, Salve argued.
Another prayer made by CREDAI is for a direction to lenders to not charge interest on the loan for the period of moratorium
The decision was taken in a bid to address the financial impact of the lockdown.
Source Link
