New Delhi, April 30: The Supreme Court on Thursday directed the Reserve Bank of India to ensure that its March 27 guidelines directing lending institutions to allow a three-month moratorium to all borrowers was implemented in “letter and spirit.” 

While the three judge bench of justices NV Ramana, Sanjay Kaul and BR Gavai, disposed the matter because the petitioners were not borrowers, it also noted that that the counsel for the petitioner had submitted that the RBI guidelines on moratorium had not been implemented, The Economic Times reported. 

“The learned counsel for the petitioner submits that the Circular dated 27.03.2020 issued by the Reserve Bank of India has not been implemented by the banks,” the apex court order said. “In view of the above, we direct the Reserve Bank of India to ensure implementation of the Circular dated 27.03.2020 in its letter and spirit.” 

The apex court also sought to know from Solicitor General Tushar Mehta whether or not the benefits implemented by the RBI for the lockdown period are being extended to borrowers. 

On March 27, the central bank has permitted banks and lending institutions to allow moratorium to all its customers as per the board approved policies to tide over the liquidity crunch faced due to Covid-19. But, most banks decided not to extend the moratorium benefit to non-bank lenders who had in turn passed on this benefit to their borrowers. 

NBFCs and housing finance companies had shot off an urgent SOS to the RBI Governor Shaktikanta Das claiming that they would run out of cash by May-June if they don’t get the benefit of the moratorium on repayments applicable to other borrowers. 

NBFCs claimed that while they would have nil cash by June, housing finance companies will have only 4.5% cash reserves remaining, precariously low levels against regulatory minimum of 15% capital adequacy. 

Read more at:

0 CommentsClose Comments

Leave a comment