Indian courts tend to rule in the coming months on cases along with the decisions that could clarify what major roles banks are contributing in helping companies with destruction by the pandemic.
Moreover, it may be among the first of the verdicts that one of the most important decisions taken by the Supreme Court decision within a week on requests of big borrowers seeking relief on repayments and defaults, and being called by the moratorium case. The court has to strictly follow the norms on pending bankruptcies. This would be considered as the new year resolution to bring billions of dollars.
The legal issues of India’s lenders, government, and central bank against corporate borrowers struggling to survive amid lockdowns promoted by Covid-19.
The leading companies are requesting more relief as the Reserve Bank of India examines the economy that shrinks with 7.5% of the fiscal year, which could cause profits for lenders than the central bank is witnessing so far.
In December the Supreme Court is completely hearing arguments in the case that lasts for around two months. It is witnessed that to provide a verdict in coming weeks, there is no date that has been announced.
In the same case, the top court is on the verge to rule on petitions by the Central bank and lenders to lift an order that marks loans as non-performing assets.
The court has recently issued orders favorable for borrowers, including stopping banks from marking accounts as bad loans and barring lenders from selling pledged assets. The top courts are also on the verge of the government to subsidize a 65 billion rupee interest waiver for small borrowers.
Some of the lenders raised the question that India’s banks are stuck with one of the world’s greatest bad-debt piles that would reflect more reluctance to lend if courts issue orders that conflict with their contracts.