Supreme Court Seeks RBI’s Reply On Credai’s Loan Moratorium Plea
The petition seeks clarification on whether extension of loan moratorium is mandatory for all lenders, including NBFCs.
The Supreme Court agreed to hear a petition filed by the real estate developers’ body that sought clarity whether such builders are eligible for a loan moratorium granted by the central bank.
The three-judge bench comprising Justice L Nageswara Rao, Justice Sanjay Kishan Kaul and Justice BR Gavai asked the Solicitor General of India to respond within two weeks.
The Confederation of Real Estate Developers’ Associations of India moved the top court, seeking to know if all non-bank financial companies have to mandatorily extend the benefit of loan moratorium to their borrowers or banks could use their discretion.
The Reserve Bank of India in its circular on March 27 allowed banks to extend a moratorium on loans due for payment between March 1 and May 31.
Senior Advocate Harish Salve, appearing for Credai, told the top court that there is confusion whether the RBI’s circular is binding or there is an element of discretion involved. He highlighted that the RBI in its reply during a proceeding had said it was up to the banks, but the central bank’s governor at a separate occasion said the circular was binding on all lenders.
As a result of this, there are certain members of the real estate body who are not being extended the benefit of the loan moratorium, Salve told the top court.
Solicitor General Tushar Mehta said he would seek instructions on the matter from the RBI and inform the court of its stand.
The bench is now likely to take up the matter after two weeks.