NPAs: RBI Moves Supreme Court To Club All Petitions Against February 12 Circular
The legal battle against RBI’s Feb 12 circular now in Supreme Court.
The Reserve Bank of India on Monday moved the Supreme Court seeking to club all pending petitions against its Feb. 12 circular on bad loans. The matter is expected to be heard by the apex court on Tuesday.
The RBI has filed a transfer petition for all cases against Feb 12 circular, the official said, counting as many as 14 cases against the circular in various High Courts.
The RBI wants them to be clubbed to avoid industry-specific exemption and conflicting judgments in different courts, the official added.
RBI has not made any statement on this nor confirmed this move.
The RBI had released on Feb. 12 a revised framework on the resolution of bad loans, according to which banks will have to disclose defaults even if the interest repayment is overdue by just one day and frame a resolution plan within 180 days. Failing which the account/asset will proceed towards insolvency resolution.
Earlier this year the Independent Power Producers’ Association had filed a petition in the Allahabad High Court opposing the RBI circular, saying it would push projects with a capacity of about 60,000-70,000 MW towards bankruptcy.
The Allahabad High Court had ordered in June that no action be taken against the power companies based on the central bank’s new stressed assets framework till the Finance Ministry hears their contention. The central bank, according to submissions mentioned in a report prepared by the Department of Financial Services, doesn’t favour giving more time.
Among the other cases filed against the RBI circular is one by the All India Bank Officers’ Confederation (AIBOC) in the Delhi High Court, according to an Economic Times report.