Thread by @barandbench

(RBI circular on Loan Moratorium)

#SupremeCourt will resume its hearing on the batch of petitions seeking relief in the form of extension of moratorium period beyond six months or waiver of interest on interest.

@RBI #LoanMoratorium

SC resumes hearing.

A petitioner expresses gratitude towards FinMin, RBI for handholding small borrowers

Justice MR Shah: Then withdraw your petition

Solicitor-General Tushar Mehta: please have a look at Oct 9, 2020, affidavit. I am giving a broad outline without delving into the nitty grities

SG: several pleas came to be filed by several factors saying that sector specific plan should be evolved under Article 32 petition. Taking pandemic as a national disaster, these are valid measures taken by Govt of India through Finance ministry and RBI

SG: 20,000 cr Aatmnirbhar package announced, 19.8k cr liquidity to power distribution cos. We allowed loan restructuring since no more scope for further help by Centre. Relief was also given to real estate sector, 3 lakh cr for MSMEs

SG lists out various measures taken by finmin and RBI. Restructuring and liquidity measures for sectors such as power, retail, MSMEs, etc
@RBI
@FinMinIndia

SG refers for Kamath committee's report on restructuring of big loans. And separate mechanism for restructuring small loans by lending institutions is there

Justice Shah: Is Kamath committee's recommendations were not for big borrowers.

SG clarifies they were for big borrowers

SG: Applicable to lending greater than 1,500 cr

SG: Those accounts not covered in Kamath committee reccos don't have to wait Banks already approaching account holders to get loans restructured

SG: Complete elasticity given to banks, resolution plans, payment plan can be rescheduled. Granting moratorium based on income stream of borrower.

Moratorium period can be granted as soon as resolution plan is approved

SG: Those accounts not covered in Kamath committee reccos don't have to wait Banks already approaching account holders to get loans restructured

SG: Resolution can't be invoked before Dec 31, 2020. Pre-COVID defaulters can't benefit from fresh resolution framework

SG: Resolution can't be invoked before Dec 31, 2020. Committee studied commercial situation, spoke to stakeholders Committee assessed stress in various sectors. Disaster Management Authority has done whatever it could. NDMA has already done what it could under law

SG: IBC process already suspended since March to stop companies from slipping into bankruptcy

.@FinMinIndia through Solicitor-General Tushar Mehta tells #SupremeCourt: It's responsibility of banks to credit compound interest waiver for loans up to 2 crores, not for consumers to remind the banks of this scheme.

#LoanMoratorium

SG: We have taken a decision that those who have paid EMIs during moratorium cannot be punished. Availed moratorium or not availed, or partly availed - all are eligible.

SG: banks havs to lodge claim to SBI for which a separate nodal agency is created, they’ll verify, take it from Government and then pay it

SG: I am a credit card holder and I received SMS for ex gratia credit

Sc: but do you need it? People like you should not get the benefit

Justice MR Shah: But question is who uses your credit card

SG: Among both of us, I’m the less miser and hence I use it

#Loan #loanmoratorium

Justice Bhushan: People with credit cards should not be given this benefit, they are purchasing things using the card and they dont have a loan.

#LoanMoratorium

SG: This is not a case of no action. Even if the petitioners say that there can be a better option that too cannot be an opportunity for this Court to interfere under Article 32. Sector specific plan is perhaps not possible in this case under 32

Dr Abhishek Manu Singhvi: I am grateful that SC has considered that these are extra ordinary times. I am not seeking liquidity injunctions for specific relief.

@DrAMSinghvi

Singhvi: Minor tweaking can give a relief to a lot of segments. It is nothing for which court needs to give a mandamus. These are circulars which needs to be inclusionary.

Singhvi appears for association for generating companies: we are a special and abused class. Even Pre covid parliamentary standing committee on March 7 this year talks about how power must be supplied under schemes even if restructuring takes place

Dr Singhvi: In the Additional affidavit filed on Oct 9 it notes that power sector has a huge importance for the ones who have taken power from them.

@DrAMSinghvi
#LoanMoratorium

Singhvi: Not even the transmission, but it is the generating companies which are suffering the most. Now there is a total debt of 1.2 lakh crore.

Singhvi: a large part of the borrowings cannot be restructured due to certain exclusions. A large part of the borrowings by LIC. These loopholes needs to be rectified by RBI. I am seeking actual relief.

Singhvi: such a clarification under Article 14 has no nexus to objective sought to be achieved.

Singhvi: benefit of restructuring should be allowed at an opt in or opt out stage. Here centre says restructuring can only be initiated at the instance of the lender.

Singhvi: minor tweaks are required. @RBI needs to revisit the circular and make thse changes.

Singhvi: Banks are not proceeding to recover loans but then want to recover guarantees. Your lordship is not permitting something but its not like you don't do it from left hand but do the same thing from the right hand.

Singhvi: Please formally issue notice and ask them to respond.

SC: We have heard you.

SG: they can make a representation why to issue notice

SG: Dr Singhvi may have some point or not have, he can approach RBI rather than keeping the matter pending

SC: Let suggestion go to RBI. But we are not deciding anything now

Singhvi: But a one week time should be given so that they reply.

Senior Adv Rajiv Dutta: All this has happened only with the interference of this Court

SG: Let us not go into all of this

SC: We are disposing off Mr Duttas plea

Dutta: first two affidavits of RBI needs to be dealt with

Justice Bhushan: We are disposing off your petition. You have already said twice that you want to

Senior Adv Huzefa Ahmadi: We had filed an IA in Mr Dutta plea. Please keep it open

SC to Ahmadi: Okay we will hear you.

SC to Adv Dutta: You will file no more written submissions. We are disposing off the plea. Everyone you want your case to end. Everytime we are hearing you are interrupting us.

SG Mehta: You have been the custodian of Fundamental rights. But @DrAMSinghvi gives a political point by saying Centre did not take any step without SC's intervention. This is not correct, we announced packages in March this year.

SC: Mr Singhvi appeared for power generation companies. He will submit his arguments to SG and RBI. He may do so by tomorrow. Mr Duttas plea is disposed off. IA in that plea be kept alive. List matter next week

#SupremeCourt

Senior Adv V Giri: all those persons have issues they need to send representation to RBI. So that we can come with responses.

SG: Atleast ask parties to submit synopsis so that we are not caught by surprise. @DrAMSinghvi made submissions which we were not aware of.

Supreme Court: all parties to file short submissions/suggestions to RBI and Centre before the hearing so that appropriate response be given.

RBI loan moratorium scheme: Why should credit card users get benefit? Supreme Court to Centre

#RBI #loanmoratorium #SupremeCourt
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