Plea for NDMA collecting data on financial stress caused by pandemic

Resolution of financial debts cannot be left solely in the hands of individual banks and their policies: petitioner

Business and industry sectors, seeking an extension of moratorium or even waiver of interest on loans, told the Supreme Court on Thursday that the National Disaster Management Authority (NDMA) must collect empirical data on the financial stress caused by the COVID-19 pandemic.

Appearing before a Bench led by Justice Ashok Bhushan, senior advocate Ravindra Shrivastava, representing one of the petitioners, said there was need for a calibrated policy to be implemented under the Disaster Management Act.

Resolution of financial debts cannot be left solely in the hands of individual banks and their policies, he submitted in his rejoinder to the court.

Absolute distress was prevailing at the moment… Huge profits being made by banks. This was a case where the NDMA should have come out, instead of handing over to banks, he submitted.

The court reserved the case for judgment.

RBI clarifies

On Wednesday, the Reserve Bank of India (RBI) maintained in the court that there had not been a single case of COVID-19 related financial stress to which banks have shown an “apathetic” attitude.

The court is hearing several pleas by industry and business sectors, including power and real estate, to extend the moratorium or even waive the interest on their debts due to losses incurred during the pandemic.

The Indian Banks Association had said these pleas extend beyond the financial stress caused by the pandemic. He asked whether some of these sectors have placed on record anything to reveal how wobbly they were even before the pandemic.

In his turn, senior advocate Mukul Rohatgi, for the State Bank of India, had pleaded in support of the small depositors who form the “backbone” of the banking system.

“Small depositors are faceless in these proceedings. It is not a case of borrowers versus bank. They are the backbone of the financial system. Banks have to give interest to these depositors. How can we leave them?”, Mr. Rohatgi had asked.

The RBI had told the court that extending the date of the loan moratorium was “not viable”.

It had referred to clause 3 of its August 6 circular for ‘Resolution Framework for COVID-19-related Stress’ to point out that lending institutions, guided by their respective Board-approved policy, would prepare viable resolution plans for eligible borrowers. However, the benefits would only be provided for borrowers stressed on account of COVID-19.

You have reached your limit for free articles this month.

Subscription Benefits Include

Today’s Paper

Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.

Unlimited Access

Enjoy reading as many articles as you wish without any limitations.

Personalised recommendations

A select list of articles that match your interests and tastes.

Faster pages

Move smoothly between articles as our pages load instantly.

Dashboard

A one-stop-shop for seeing the latest updates, and managing your preferences.

Briefing

We brief you on the latest and most important developments, three times a day.

Support Quality Journalism.

*Our Digital Subscription plans do not currently include the e-paper, crossword and print.



Source by [author_name]

Leave a reply

Please enter your comment!
Please enter your name here

Most Popular

Minorities Commission to look into scholarship delays

Several students from the minority community have complained about the delay in the release of scholarships The Karnataka State Minorities Commission will shortly...

Modi, Xi expected to attend ‘virtual’ WEF meet in Davos

The forum expects to hold its annual meeting in person in May in Singapore. World Economic Forum organizers are expecting leaders including Prime...

MCC’s quest for cleanest city tag gains traction

Mysuru City Corporation (MCC) is banking on a slew of new initiatives, including waste water recycling, in its bid to reclaim the cleanest...

Recent Comments