COVID-19 in India: Delhi HC seeks reply of Centre, RBI and others on restructuring of loans

ANIUpdated: Thursday, June 11, 2020, 12:35 PM IST
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Delhi High Court |

Delhi High Court has issued notice to the Central government, Reserve Bank of India (RBI) and others on a plea seeking directions to allow a one-time restructuring of loans by all banks and non-banking financial companies (NBFCs) in the wake of coronavirus-induced lockdown.

A bench of Justice Navin Chawla on Wednesday asked the RBI, Union of India, and National Highways Authority of India (NHAI) to file their reply on the petition filed by Bharat Road Network Ltd (BRNL).

Senior advocate Nidhesh Gupta, appearing for BRNL, requested the court to allow a one-time restructuring of loans as a relief measure to the industries, companies, retail customers to ensure that they are not classified as non-performing assets after the lockdown.

BRNL told the court that due to lockdown commercial, private and industrial establishments and all transport services were suspended which affected inter-district and inter-state movement of passenger vehicles and buses is permitted with restrictions except in containment zones, with mutual consent of States/UTs.

According to the petition, Bharat Road Network Ltd (BRNL) is a public listed company focused on the development, implementation, operation, and maintenance of Roads like Highways Projects on Build-Operate-Transfer basis undertaking through the group companies.

The plea said that the issue involved in the present Petition is regarding the restructuring of the loan accounts of the Petitioners, due to deterioration of the financial landscape of the economy.

It said that due to lockdown commercial, private and industrial establishments and all transport services activities were suspended.

The RBI is required to issue directions in the public interest to prevent the affairs of any banking company being conducted in a manner detrimental to the interest of depositors or in a manner prejudicial to the interest of Banking Company, which the Banking Companies shall be bound to comply, the plea said It also mentioned that the RBI had on March 27, 2020, issued a circular allowing banks to give relief to borrowers by way of a three-month moratorium on loan repayments.

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