Resolution of financial money owed can’t be left solely within the fingers of particular person banks and their insurance policies: petitioner
Business and trade sectors, looking for an extension of moratorium and even waiver of curiosity on loans, informed the Supreme Court on Thursday that the National Disaster Management Authority (NDMA) should accumulate empirical data on the financial stress caused by the COVID-19 pandemic.
Appearing earlier than a Bench led by Justice Ashok Bhushan, senior advocate Ravindra Shrivastava, representing one of many petitioners, mentioned there was want for a calibrated coverage to be carried out below the Disaster Management Act.
Resolution of financial money owed can’t be left solely within the fingers of particular person banks and their insurance policies, he submitted in his rejoinder to the court docket.
Absolute misery was prevailing in the mean time… Huge income being made by banks. This was a case the place the NDMA ought to have come out, as a substitute of handing over to banks, he submitted.
The court docket reserved the case for judgment.
On Wednesday, the Reserve Bank of India (RBI) maintained within the court docket that there had not been a single case of COVID-19 associated financial stress to which banks have proven an “apathetic” angle.
The court docket is listening to a number of pleas by trade and enterprise sectors, together with energy and actual property, to increase the moratorium and even waive the curiosity on their money owed resulting from losses incurred in the course of the pandemic.
The Indian Banks Association had mentioned these pleas prolong past the financial stress caused by the pandemic. He requested whether or not a few of these sectors have positioned on file something to disclose how wobbly they had been even earlier than the pandemic.
In his flip, senior advocate Mukul Rohatgi, for the State Bank of India, had pleaded in help of the small depositors who type the “backbone” of the banking system.
“Small depositors are faceless in these proceedings. It is not a case of borrowers versus bank. They are the backbone of the financial system. Banks have to give interest to these depositors. How can we leave them?”, Mr. Rohatgi had requested.
The RBI had informed the court docket that extending the date of the mortgage moratorium was “not viable”.
It had referred to clause three of its August 6 round for ‘Resolution Framework for COVID-19-related Stress’ to level out that lending establishments, guided by their respective Board-approved coverage, would put together viable decision plans for eligible debtors. However, the advantages would solely be offered for debtors burdened on account of COVID-19.