Status quo on accounts not declared as NPAs on 31 August, says SC

Politics


The Supreme Court on Thursday passed an interim direction holding that the accounts not declared as non-performing asset (NPA) as on 31 August shall not be declared as NPAs till further orders.

The apex court will continue the hearing of the case on 10 September.

The interim order was passed by a bench headed by Justice Ashok Bhushan, comprising R Subhash Reddy and MR Shah while hearing a batch of petitions seeking waiver of interest, waiver of interest on interest on the suspended EMIs during the extended moratorium period amid the covid-induced lockdown.

In March, the Reserve Bank of India had allowed a three-month moratorium on EMIs of term, other loans due between 1 March and 31 May. The moratorium was later extended till 31 August.

Petitioner Gajendra Sharma said, during the three-month period, the interest would continue to accrue during the moratorium, which ultimately the borrower would have to pay. The petitioner argued that no interest should be charged during the moratorium because people are facing “extreme hardship”. The petition also stated that paying additional interest on top of regular EMIs would be difficult.

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