Accounts Not to Be Declared NPAs Till Further Notice: Supreme Court

Pleas were filed in the Supreme Court to raise the question on the validity of RBI's circular issued on March 27. The circular allowed lending institutions to grant moratorium for three months EMI (Equated Monthly Instalments) on term loans falling due between March 1, 2020 and May 31, 2020, due to the pandemic. This period of the moratorium was later extended till August 31.

The Apex Court passed an interim order in this regard. The order stated that the accounts that were not declared as non-performing assets (NPA) till 31 August should not be declared as NPAs till further notice.

The Bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah passed the order and said that "no account shall become NPA at least for a period of two months".

The Solicitor General told the Bench that the moratorium period on repayment of loans amid the pandemic is extendable by two years.

The top Court will continue to hear the arguments on September 10.