Plea filed with SC seeking moratorium of 6 months on repayment of bank dues

A plea has been filed with the Supreme Court seeking a moratorium of six months on the repayment of bank dues owing to the second wave of the Coronavirus (Covid-19).

 

The RBI is yet to take a call on a moratorium, but last week had said banks can restructure loans for up to two years. The plea also sought extension of time period for the restructuring scheme, legal news portal Live Law reported.

 

According to the report, the plea, filed by Advocate Vishal Tiwari has urged the Court to direct all financial institutions not to take action for auctioning of any property of citizens of any party for a period of six months. No account should also be declared as non-performing for six months, the plea has sought.

 

The plea blamed the Centre and the RBI for not doing enough to mitigate the hardships faced by people during the crisis and said no financial package has been announced to give succor to the affected.

 

"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," Live Law quoted from the plea.

 

It is not clear yet if the plea has been admitted by the Court, and if so, what further action the RBI could take.

 

However, it is clear that the central bank will come out with more measures in the immediate future, some of which could be seen during the monetary policy scheduled for the first week of June. Measures could come even earlier considering the severity of the situation.

 

The restructuring exercise by the banks for individual and small borrowers with loans outstanding of up to Rs 25 crore, can include a moratorium, or whatever the bank decides at its discretion.