SC tells RBI to implement a moratorium on letter and spirit
On Thursday he ordered the Reserve Bank of India () to ensure that its circular on the repayment of the three-month loans between March 1 and May 31 is implemented in its letter and spirit, as it appears the benefit is not spreading.
The superior court told Attorney General Tushar Mehta, who appeared for the Center, that the benefit granted by the RBI does not appear to have been extended to borrowers. It was alleged that since the March 27 circular was not being implemented in letter and spirit, it should be shelved.
However, a bank of Justices NV Ramana, Sanjay Kishan Kaul and BR Gavai, which took up to four PILs related to the RBI circular via video conference, said the petitioners are not aggrieved parties, therefore it is not interfering with the circular.
We directed the RBI to ensure the implementation of the circular dated March 27, 2020 in its letter and spirit, the bank said, in its order in one of the PILs submitted by Kamal Kumar Kalia.
During the hearing, the bank asked Petitioner Saju Jacob's attorney how much loan the Petitioner had taken since none of the injured parties had appeared. The attorney replied that he is not involved in any loan and that he is only a PIL petitioner.
The bank said there has to be an injured party, as it is a political decision and is intended for those who have taken out a loan.
Mehta responded that the circular applies to borrowers and urged the court to request PIL consideration as representation before the RBI.
The bank said there should be some guidelines for banks to extend the benefit to borrowers. The bank declined to entertain three other PILs related to the March 27 circular after finding that none of the petitioners has taken a loan. and is an aggrieved party.
On March 27, the RBI had issued a series of measures to verify the financial impact of the national closure and had issued a circular freeing all banks and financial institutions to allow a three-month moratorium on the payment of fees with respect to to all outstanding term loans such as March 1, subject to the borrower making such request. He had said that the repayment schedule of loans such as also the residual term would be changed in three months after the moratorium period. Interest will continue to accrue on the outstanding portion of the term loans during the moratorium period, the RBI had said. .