The Supreme Court on Friday issued notices to the Union government and Reserve Bank of India (RBI) in a plea by an association of property developers seeking clarification on the central bank’s circular allowing a three-month moratorium on loan repayments.
The apex court has sought a response within two weeks to the plea by Confederation of Real Estate Developers Association of India (Credai), which approached the court on 12 May, seeking clarification on whether the notification mandates all non-banking financial companies (NBFCs) to enforce a moratorium or whether the bank has discretion in granting this benefit.
Senior advocate Harish Salve, appearing for Credai, told the bench headed by Justice L. Nageswara Rao, and also comprising Justices Sanjay Kishan Kaul and B.R. Gavai, that when the matter came to court in a separate case, the central bank said it is up to banks to grant the moratorium, though the RBI governor’s speech indicated it was binding.“NBFCs have large loans and banks are saying they don’t need to give relief,” Salve told the bench.
Solicitor general Tushar Mehta told the bench he will take instructions from the RBI, the Union finance ministry, and the Securities and Exchange Board of India with respect to this confusion.