Supreme Court Restrains Banks on Declaring Loan as NPA

Supreme Court Restrains Banks on Declaring Loan as NPA
The Supreme Court has announced that the accounts that were not declared as non-performing assets till August 31, 2020, would not be declared NPA until any further orders. This announcement has come as a relief to stressed individual and commercial borrowers who are facing hardship due to the impact of the Covid-19 pandemic.
Justice Ashok Bhushan headed the bench while hearing a batch of pleas that have raised the issue of interest being charged on the installments that are deferred during the moratorium period due to the Covid-19 pandemic.
The apex court has passed the order and has also noted the submissions of senior advocate Harish Salve, who appeared for the bank's association and stated that no accounts shall become NPA for a minimum of two months. While, Solicitor General Tushar Mehta, who appeared for the Centre and the Reserve Bank of India says that the backbone of the economy, every sector, and every economy is under stress due to the pandemic. 
The Banks can declare a loan NPA if the principal or interest is not serviced by the borrower for more than 90 days. Post the loan being declared NPA, the banks could resort to recovery processes that include selling the mortgaged property. 
On the other hand, the borrowers have stated that they have not earned anything through their business during the lockdown, yet they were slashed with interest as well as interest accrued on the deferred installments. Hence, they say once the suspension period ends, post the pandemic condition, they could be saddled with all the deferred installments along with compound interest, and the banks could declare their loans as NPAs.
The Confederation of Real Estate Developers' Association of India (Credai), through senior advocate Kapil Sibal, spoke on behalf of the various sectors narrating their difficulties faced in the pandemic period. He stated that the attempt of both the Centre and the RBI appeared to solely protect the interest of banks and lending institutions. 
Senior advocate Harish Salve, who appeared for the IBA, which has 247 banks as its members, that includes SBI has assured the court that no loan account would be categorized as NPA for the next two months that is until October 31 irrespective of the repayment default exceeded the 90-day deadline.