Page 24 - Banking Finance May 2021
P. 24
LEGAL UPDATE
Legal
Cases
HC seeks Government Report of the Inter-Departmental They further said, banks would provide
Group of RBI & its Feasibility of compound interest waiver for the
response on feasibility of Introducing Islamic Banking in India. period a borrower had availed
Islamic Banking moratorium. For example, if a
High Court has recently sought Supreme Court order on borrower availed moratorium of three
response from the authorities to the interest waiver: PSU Banks months, the waiver would be for that
PIL seeking feasibility of introducing period.
Islamic Banking in J&K UT. The Division may have to take Rs. 2,000 Previously, RBI on March 27, 2020
Bench of Acting Chief Justice Pankaj crore announced a loan moratorium on
Mithal and Justice Sindhu Sharma Public sector lenders may have to bear payment of installments of term loans
granted 3weeks' time to Chief a burden of Rs. 1,800-2,000 crore falling due between March 1 and May
Secretary of UT, Principal Secretary arising due to a recent Supreme Court 31, 2020, due to the COVID-19
Finance for filing of their response in judgment on the waiver of compound pandemic, later the same was
opposition to the PIL. interest on all loan accounts which extended to August 31, 2020.
Union Ministry and RBI were opted for moratorium during March- The apex court order this time is only
represented by their counsels Tashir August 2020. limited to those who availed
Shamsi and J&K Bank was represented The judgment covers loans above Rs. moratorium so the liability of the public
by their counsel Senior Advocate Z A 2 crore as loans below this got blanket sector bank should be less than Rs.
Shah and they informed the court that interest on interest waiver in 2,000 crore as per rough calculations.
the response on their behalf has been November, 2020. Compound interest Besides, the order does not specify a
filed however the counsel appearing support scheme for loan moratorium timeframe for the settlement of
for JK Government sought some time cost the government Rs. 5,500 crore compound interest unlike last time so
to respond to the contentions raised in during 2020-21 and the scheme banks can devise a mechanism of
the plea. covered all borrowers including the adjusting or settling it in staggered
The DB granted 3 weeks' time to him prompt one who did not avail manner.
for the same. The PIL has been filed by moratorium. Hyderabad woman shares
an NGO (Peoples Forum) through its According to banking sources, initially
advocate Altaf Haqani seeking 60% of borrowers availed moratorium banking credentials with
direction from the court that Union and gradually the percentage came known acquaintances,
Ministry of Finance be directed to file down to 40% and even less as
response and issue necessary collection improved with ease in loses Rs. 3.10 lakh
notification for Introduction of Sharia lockdown. In case of corporate, this According to the report, a woman
Complaint windows as recommended was as low as 25% as far as public from Hyderabad has recently shared
by Deepak Mohanty Committee and sector banks were concerned. her banking credentials with two
24 | 2021 | MAY | BANKING FINANCE