A writ petition has been filed before the Supreme Court seeking a direction to the RBI to issue instructions and guidelines to initiate incentive packages and interim relief for the commercial borrowers attached into small scale business in the wake of the second wave of COVID-19.
The petitioner, Amaltas Apparel and Accessories Pvt Ltd, a small MSME registered company, had moved the Apex Court through the lawyer, Vishal Tiwari.
The petitioner sought direction from the Top Court to the Reserve Bank of India (RBI) and the banks to desist from imposing the Non-Performing Assets (NPA) norms for MSME units for a period of two years.
The emergence of the COVID -19 and the subsequent lockdown initiated to restrict the transmission of COVID-19 has impacted the world economically. The MSME Sector in India has faced a huge economic hardship wherein it has become a daily struggle for sustenance, Tiwari said in his petition.
The RBI circular extending the moratorium till August 31, 2020, came as oxygen to such entities as it would have become a huge financial burden for the borrowers to pay the EMIs regularly in this period, the petitioner said.
In this present dispute, the petitioner is MSME registered company, involved in retail fashion, facing a severe economic struggle. The petitioner since the emergence of COVID-19 is going through a lot of struggle in the form of failed business and severe decreased cash flows. Such a situation of the business has led to the situation of difficult sustenance, the petitioner claimed.
As per the circular issued by the RBI, a relief in the form of the moratorium was provided to the borrowers till August 31, 2020, to sustain during this situation of uncertainty and hardship, the petitioner said.
As per this circular, the petitioner was granted the moratorium. During such period, the Supreme Court through a batch of writ petitions held that In view of the above, the accounts which were not declared NPA till August 31, 2020, shall not be declared NPA till further orders.
Subsequently, on March 23, 2021, the Apex Court through the same batch of writ petitions had, in its judgment, vacated this order and stated that the account can be declared NPA in accordance with the law, the petition said.
However, it is to be noted that the emergence of the second wave of the COVID-19 has again pushed the country back to a similar situation of the first wave, the petition said.
( With inputs from ANI )
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