The Supreme Court on Friday dismissed a Public Interest Litigation (PIL) seeking a fresh moratorium on loan repayments in view of the second wave of COVID-19. The top court refused to pass an order on the fresh moratorium and said that the issues raised in the PIL are within the scope of policy decisions.
However, the Supreme Court said that it is up to the government to assess and pass an appropriate order.
Last year, the Reserve Bank of India announced a moratorium on loan repayments after the government imposed a nationwide lockdown to contain the spread of the Covid-19 pandemic.
The moratorium was announced on all term loans including home, auto and crop loans to help customers tide over financial difficulties due to the coronavirus outbreak and the subsequent nationwide lockdown.
Last month, the Reserve Bank of India reopened its one-time loan restructuring scheme for individuals and small businesses affected by the state-wise lockdown amid the second wave of the coronavirus pandemic that has hit India badly. Individuals, Small Businesses and Micro, Small and Medium Enterprises (MSMEs) with exposure up to Rs 25 crore, who had not availed the restructuring earlier and where the loan was classified as standard as on March 31, 2021, would be eligible for second were eligible for debt restructuring. Round.
Mr Das said the restructuring under the proposed framework could be implemented by September 30 and would have to be implemented within 90 days thereafter.
“The resurgence of the COVID-19 pandemic in India in recent weeks and the associated containment measures adopted at the local and regional levels has created new uncertainties and impacted the nascent economic revival that was taking shape. The most vulnerable category is individual borrowers, small businesses and MSMSEs,” RBI Governor Shaktikanta Das said in a speech last month.