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SC Asks RBI To Ensure Banks Implement Three Month Moratorium Policy In “Letter And Spirit”

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The Supreme Court has asked the Reserve Bank of India to ensure that its ‘loan moratorium policy’ permitting exemption from paying EMI’s and other loans during the COVID-19 lockdown period is implemented by banks.

The matter was heard today by a three judge Bench of Justices NV Ramana, Sanjay Kishan Kaul and B.R Gavai.

Supreme Court also sought to know from Solicitor General Tushar Mehta whether or not benefits implemented by RBI for lockdown period are being extended to borrowers.

A batch of Petitions by Anish Roy, Devesh Kumar Chauvia, Yashmaan Ghanshyam and kamal Kumar Kalia through Advocate Sanju Jacob was filed in the Supreme Court challenging circular of RBI dated March 27 on three month moratorium permitted for loan repayments due to economic impact of Covid-19 pandemic.

Supreme Court also noted that it was not for them to interfere as the Petitioner himself was not an aggrieved party.

Justice S.K Kaul observed that main purpose of PIL was lost. He stated, “This is not public interest. Lawyers keep filing petitions on what they feel is possible. The whole concept of PIL is lost.”

RBI on March 27 permitted all lending institutions to allow three month moratorium on payment of installments, including those for credit cards and for all term loans outstanding between March 1, 2020 and May 31, 2020.

Similar three month deferment for all working capital loans to help borrowers face Coronavirus related economic hardships was also permitted.

Petitions in Supreme Court pointed out that interest would continue to accrue during 3 month moratorium, which would have to be borne by customer if he chose to avail of the benefit.

Question before the Court was that whether any petitioner had loan running in the case.

Advocate Shibshankar Saha, appearing for petitioners, stated that though there were no loans running on personal account of petitioner, plea was for public benefit at large.

Js. Ramana said that personal hardship was important to determine locus in the case. It was stated that we are not here to determine whether scheme is good or bad. If you are not a borrower, you don’t know anything. 

The Bench disposed of four petitions but asked RBI to ensure that its scheme is implemented by Banks. 

The Court stated, “We direct the Reserve Bank of India to ensure implementation of the Circular dated 27.03.2020 in letter and spirit”

-India Legal Bureau

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