Declare Loan Moratorium Amid COVID Second Wave : Lawyer Makes Representation Before Centre & RBI

A representation has been made before the Union of India and Reserve Bank of India urging them to adopt measures like loan moratorium which could sufficiently redress the financial stress faced by the borrowers in the Second wave of COVID 19. The representation has been made by Advocate Vishal Tiwari, in the light of the observations made by the Apex Court while disposing of his writ petition filed seeking financial relief in the form of fresh loan moratorium, extension of time period under the restructuring scheme and temporary cease on the declaration of NPA by the financial banks in the wake of the COVID-19 pandemic. " We, however, observe that all the issues, which are raised, are policy matters and it is for the Union of India and the Reserve Bank of India to consider and take appropriate decision." the Court had observed while refusing to order loan moratorium extension.While noting that the Apex court has also held that the Government can adopt decisive policy in financial matters, the Representation has requested the Government and Reserve Bank of India to take necessary steps to benefit borrowers in the following ways: By providing relaxation in paying EMI's, By not turning the Accounts NPA By not evicting, dispossessing and auctioning of any property by the lending institutions till the Situation eases and normalises By protecting the borrowers from the illegal and violent methods of Recovery. The representation has stated that the circular issued by RBI on May 5th 2021 as "Resolution "lan 2.0 for the MSMEs and Individual borrowers" is not sufficient to provide immediate relief to the borrowers in the present pandemic, as it speaks about eligibility criteria which prevents the vast number of borrowers from getting benefit of it. Referring to stay operating on declaration of NPAs till 23rd march 2021 granted by Supreme Court, the Representation has stated that the relief was granted by RBI from 1st of April 2021. According to the Representation, the borrowers whose accounts have been turned NPA in between 24th march 2021 and 31st march 2021 should also be permitted to get benefit of the circular dated 5-5-2021 resolution plan 2.0.The Representation has also raised another important issue of non-cooperation shown by Banks towards the borrowers and Account holders, saying that the circulars and reliefs issued by the RBI in the present pandemic and earlier, are not implemented by the banks in their letter and spirit. According to the Representation, many lending institutions use illegal methods for recovery by sending Goons, making abusive phone calls to borrowers and threatening them, which cannot be permitted under rule of law and is against fair practice code. Click here to read the representation

Declare Loan Moratorium Amid COVID Second Wave : Lawyer Makes Representation Before Centre & RBI

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Declare Loan Moratorium Amid COVID Second Wave : Lawyer Makes Representation Before Centre & RBI

Srishti Ojha

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Srishti Ojha

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