Supreme Court of India
Supreme Court of India

The Supreme Court on Thursday asked the RBI to reply on the loan relief sought by the power producers' body, which was claimed though the moratorium applied on the principal loan, but the banks were taking coercive steps on other aspects such as guarantees.

Senior advocate A.M. Singhvi, representing the power producers' association, submitted before a bench headed by Justice Ashok Bhushan that it is a subterfuge happening by the banks. The bench also comprising Justices Subhash Reddy and M.R. Shah asked the association to give suggestions on loan relief to the RBI.

The top court also asked the RBI to consider their grievances. The power producers' association urged the top court to allow restructuring of loans from LIC, alternate investment funds, FPIs and also foreign private banks. Singhvi insisted that this a loophole which should be plugged by the RBI.

The association also sought direction to allow borrowers to opt in or out of restructuring, as currently this is at the lenders' discretion. The power body submitted before the top court that banks cannot classify them as NPAs, and cited that the body has a total debt of Rs 1.2 lakh crore. Singhvi highlighted that there are many issues with the RBI circular which need to be clarified. The top court deferred the hearing in the matter by one week.

Meanwhile, the top court also disposed of the petitions where the petitioners expressed satisfaction with the waiver of compound interest on loans up to Rs 2 crore.

Earlier during the hearing, Solicitor General Tushar Mehta informed the Supreme Court that Rs 5,270 crore has been credited to 13.12 crore accounts in the interest waiver plan so far.

The Centre has subsidised compound interest for a six-month moratorium for all loans up to Rs 2 crore. Mehta submitted before a bench headed by Justice Ashok Bhushan that the government is on top of the matter and it is taking all the necessary steps.

Mehta submitted that pre-Covid defaulters cannot benefit from a fresh resolution framework and the committee for resolution framework for Covid related stress has assessed various sectors. Detailing other measures, he assured the top court that the Disaster Management Authority has done whatever it could.

Mehta told the Supreme Court that it is the responsibility of the banks to credit compound interest waiver for loans up to Rs 2 crore, not for the consumers to remind the banks of this scheme. He urged the top court not to consider further relief to the borrowers.

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