The Reserve Bank of India (RBI) has appealed to the country’s top court to let banks classify loans as non-performing, saying a ban imposed to help borrowers in the Covid-19 pandemic could greatly harm the nation’s financial system.
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The bench continued till September 28 its earlier interim order directing banks not to declare any loan as non-performing asset due to non-payment of instalments, if it was not so declared till August 31, when the moratorium period ended.
In a major relief to individual and commercial borrowers, the Supreme Court on Thursday asked banks not to declare any loan account as non-performing asset (NPA) till it passed further orders on a bunch of petitions questioning levying of interest on loans during the six-month repayment freeze that ended on August 31.
“Provisions are made for NPAs as per the four-year provisioning cycle laid down by the RBI. Upon full provisioning being done, banks write off the fully provided NPA but continue to pursue recovery against the borrower. No loan is waived off,” said finance minister Nirmala Sitharaman rebutting Rahul Gandhi’s claims on banks writing off bad … Continue reading FM rebuts Rahul’s claim, says no loan waived off
The government is going to seek a relaxation in rules for classification of bank loans to a certain set of companies as a “sub-standard” asset, citing difficulties faced by them. These entities are engaged in export and import, or are those that depend on raw materials and inputs, from China where businesses have been impacted … Continue reading NPA relief likely for cos hit by coronavirus