oppn parties Supreme Court to Centre - Come Up With Something Concrete on Easing The EMI Burden In 14 Days

News Snippets

  • Calcutta HC says Cricket Association of Bengal is not liable to pay tax on advertisement inisde Eden Gardens cricket ground as it is not a 'public place' because it does not have unrestricted access for the general public
  • Supreme Court admits a plea from a child of a single OBC mother who had applied for an OBC certificate for her son
  • Supreme Court approves applying strict preventive detention laws for 'cybercriminals'
  • SBI likely to shift part of operations of its Global Market Unit from Kolkata to Mumbai
  • FM nirmala Sitharaman calls for a "structured, process-driven approach to compliance" and asks top I-T officials to speed up refunds and simplify processes
  • Marine insurance costs surge as the oil corridor in Strait of Homruz becomes risky due to war
  • Stocks weaken on Monday on global cues: sensex sheds 511 points to 81896 and Nifty 140 points to 24971
  • Former left-arm spinner Dilip Doshi dies in London at 77. He played for India in 33 Test matches and for Bengal in domestic tournaments
  • Pant becomes the only keeper to score two centuries in the same Test in England
  • England Test: Rishabh Pant hits his second ton and KL Rahul a classy century to put India on top, England need 350 runs on the last day, with the ptich showing signs of wear and tear
  • DGCA orders an audit of the entire aviation ecosystem in the wake of recent snags in many flights after the AI Dreamliner crash in Ahmedabad
  • 2 Pahalgam residents arrested by NIA for sheltering and aiding 3 terrorists who killed civilian tourists in pahalgam tell the agency that there were 3 LeT ultras from Pakistan that carried out the attack
  • India unlikely to agree to US demands for lower tariffs on agri products and GM food, trade deal faces fresh hurdles
  • Stocks likely to plummet today as traders will be worried about the effect of US strike on iran, oil price rise and possible inflation. Foreign funds may also withdraw in the volatile global situation
  • Oil prices likely to shoot up as US strikes at iran and the latter decides to close the Strait of Homruz
US President Donald Trump unilaterally announces a 'ceasefire' between Israel & Iran
oppn parties
Supreme Court to Centre - Come Up With Something Concrete on Easing The EMI Burden In 14 Days

By Sunil Garodia
First publised on 2020-09-11 06:50:50

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

The Supreme Court has extended the moratorium granted to borrowers until September 28. The moratorium was granted by the Centre to companies and individuals from March to June and then extended until August 31 to enable borrowers to tide over the difficulties they were facing due to the lockdown and closure of business activity which had resulted in no income for companies and businessmen and loss of job or reduction in salary for others.

But although unlocking started happening from June, economic activity has not picked up to reach earlier levels. While the entire economy is facing distress, some sectors are in dire straits. Order books of many companies are at levels where it is unprofitable to produce. The job scenario is equally dismal. The GDP had contracted by as much as 24 percent in the first quarter of this financial year and the core sectors contracted by a further 9 percent in July. The situation has not changed much from March. In fact it has gotten worse for many as in the absence of income, a major part of their liquid savings have been cannibalized by living expenses in the last five and a half months.

The Centre had earlier informed the apex court that the moratorium was extendable up to two years. But it had also said that if interest was not charged on missed EMIs, the banking system would face distress and the interest of depositors will suffer. The Supreme Court had then asked the Centre not to hide behind the RBI but to think of providing relief to stressed borrowers. In today's hearing of the case, the court categorically asked the Centre to come up with a concrete plan on how it wanted to do that in 14 days and clearly said that no more time would be granted. That effectively means that if the government does not come up with a plan, the court will decide on the matter and provide relief as it thinks fit.

The court also said that banks will not classify any loan as NPA until September 28 and the credit ratings of borrowers must not be affected due to non-payment until that date. But individual borrowers have reported harassment by collection agents of banks and have also reported that in some cases, the banks have sent adverse reports to credit bureaus that have resulted in their credit rating being downgraded. The government must look into this and set up a centralized complaint line where people can report about this.

The economic distress arising out of the pandemic is "an act of God" and it is the duty of the government to help companies and individuals in these dark times. No one is asking for waiver of loans, but a just solution that does not stress the banking system while at the same time provides time to the borrowers must be found. Otherwise, a lot of genuine borrowers (who have the will to pay back loans but do not have the resources at present) will become defaulters, lose their dignity and will not be able to access funds from the banking system for future growth.