Mumbai, April 7: The Delhi High Court said Yes Bank Ltd. cannot classify a real estate developer’s account as non-performing asset for its failure to repay dues on account of the coronavirus outbreak.
Anant Raj Ltd. argued that it defaulted on the payments due on January 1 because of the adverse effect of the pandemic on the real estate industry, Bloomberg reported. The developer relied on the Reserve Bank of India’s regulatory policy that allowed banks and financial institutions to impose a moratorium of three months on payment of instalments against outstanding loans as on March 1.
The petitioner has already repaid dues worth around Rs 1,000 crore.
Justice Sanjeev Sachdeva, who heard the case via video conference amid a nationwide lockdown to combat spreading of the novel virus, read into the Reserve Bank of India’s measures to ease financial stress on borrowers, and restored classification of Anant Raj Ltd.’s account as it stood on March 1. The developer said it would make the payment by April 25.
Yes Bank, however, argued that according to the RBI’s norms, if an instalment becomes overdue by a period of 90 days, the account must be declared as an NPA.