Petition in SC seeks direction to restrain banks from declaring defaulting loan accounts NPAs
Tribune News Service
New Delhi, June 5
As Covid-19 lockdown during the second wave of the pandemic affects a large section of the population, a petition has been filed in the Supreme Court seeking directions to the government and the RBI to restrain banks from declaring loan accounts as NPAs for non-payment of EMIs.
The petitioner—NGO Trust Distress Management Collective—urged the court to direct the RBI to ask banks not to classify any loan account as NPA for non-payments of EMIs at least for five months beginning from April.
It said the RBI should permit banks to offer a fresh moratorium for borrowers in view of the adverse financial impact of Covid-19 second wave and the Government should consider a stimulus package to help borrowers deal with the adverse financial implications of the pandemic.
It sought to highlight that last year when the situation was not as bad as what’s there during the second wave, the RBI had announced a moratorium for three months and subsequently extended it to six months and had also allowed the restructuring of loans.
The NGO said it moved the top court after getting requests from a large number of the middle-class facing extreme difficulty in paying the EMIs timely due to lockdowns imposed by various states during the Covid-19 second wave.
Citing media reports, it submitted that even private sector bank chiefs had urged the RBI for a limited moratorium on payments and restructuring loans.
