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

News Snippets

  • Rain deficit seen in India in january for the first time in 5 years
  • Heavy snowfall disrupts life in J&K, Himachal and Uttarakhand
  • Centre says Teesta Setalvad's politics is divisive and opposes her plea on conversion law
  • The ASI who shot and killed Odisha health minister Naba Kishor Das might have done so to extract revenge as the minister had rebuffed him
  • Law minister Kiren Rijiju says pleas against BBC documentary are a waste of court's precious time
  • Self-styled godman Asaram held guilty of rape and sodomy. he is already serving life term for another conviction in a rape case
  • Supreme Court to hear pleas against the ban on BBC documentary on Gujarat riots and Prime Minister Modi
  • Adani Enterprises FPO subscribed just 3% in 2 days
  • Hindenburg slams Adani response to its report, says nationalism cannot be an excuse for fraud
  • Gold hits new high in India: traded at Rs 57149 per 10 gms
  • Adani Group companies continue to bleed although Adani Enterprises reversed the trend to gain on Monday
  • Markets end positive after a highly volatile session on Monday: Sensex gains 169 points to 59500 and Nifty 44 points to 17648
  • Satellite images show significant increase in night lights in India with some states growing at 43% in 10 years and some even 400%. Economists consider this as indicator of growth
  • Bombay HC has ruled that there will be no parole for TADA victims in Maharashtra
  • Courts handed out the death sentence to 165 accused in 2022, the highest in 40 years
Investors lose Rs 5.6 lakh crore as Adani Group companies lose 29% market value in three days and the carnage is continuing
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.