No fresh NPAlabel for anyone, says SC

In a relief to borrowers facing financial headwinds in the wake of the Covid pandemic, the Supreme Court on Wednesday said accounts, which have not turned bad till August 31, 2020, should not be categorised as a non-performing asset till further order.

The top court passed the interim order while adjourning to September 10 a batch of petitions challenging the charging of interest on unpaid interest during the six-month long moratorium period.

Solicitor General

Tushar Mehta appearing for RBI told the court that the idea of moratorium was to defer payments in wake of burden by Covidlockdown, so businesses can manage working capital better.

“Idea was not to waive interest,” the Solicitor General said telling the court that the banking sector was needed for revival of any economy.

Not convinced with RBI letting banks decide the fate of the loan restructuring, the Supreme Court said, “NDMA can step in if the situation warranted. He said that the finance ministry was doing its best.”