Charging interest during moratorium is serious issue: SC
After the Reserve Bank of India said the waiver of interest charges on EMIs during moratorium will lead to loss of 1 per cent of the GDP, Supreme Court on Thursday asked the finance ministry to reply, whether the interest could be waived or it will continue during the moratorium period.
 
A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and M.R. Shah said these are not normal times, and it is a serious issue, as on one hand moratorium is granted and then, the interest is charged on loans during this period. "There are two issues in this (matter). No interest during moratorium period and no interest on interest", said Justice Bhushan.
 
Solicitor General Tushar Mehta, representing the Centre, contended before the bench that he would consult the finance ministry and file a response to both the questions. The top court allowed Mehta to file a reply on or before June 12.
 
The observation from the bench came on a petition by Gajendra Sharma, where he sought a direction to declare the portion of RBI's March 27 notification as ultra vires to the extent it charges interest on the loan amount during the moratorium period.
 
Sharma's counsel, senior advocate Rajeev Dutta, told the court the Centre is looking at the profitability of the banks and cited the recent order by top court on middle seat row in Air India matter, where the non-scheduled flights are to bring the stranded Indians from abroad. Justice Bhushan said the court is well aware, and the economic aspect is not greater than the health of the people.
 
Sharma, a resident of Agra, contended that he is already facing financial hardship during the lockdown and obstruction in 'right to life' guaranteed by Article 21 of the Constitution. Dutta argued that RBI's position on the matter means that only banks should continue to earn profits, while the entire country struggles during Covid-19 pandemic, and told the court he would file a rejoinder on the RBI's reply.
 
Mehta contended before the court that he would consult the finance ministry on this issue, and then respond on the issue with both the finance ministry and RBI's response.
 
At the beginning of the matter, the bench expressed discontent that RBI's reply was leaked to the media before the matter came before the court. "Is RBI filing the reply first in the media and then in court?" said the court.
 
Dutta contended this is a method to sensationalize the matter. The bench said this should not repeat.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    kocharbipin61

    4 weeks ago

    Shocking - if Supreme Court waives interest on loans and deposits - crores of retired people will suffer immensely.

    Uday Kotak to sell 2.83% equity to reduce stake as per RBI requirement
    Uday Kotak is selling 2.83% equity stake in Kotak Mahindra Bank, through a block deal, for around $900 million to meet the criteria set by the RBI to reduce promoter shareholding to 26% in the bank.
     
    Kotak is the promoter of the bank and Managing Director. This will be a 100% secondary placement through an accelerated book-build offering of equity shares. The block deal will take place on June 2, Tuesday.
     
    The placement agents are Kotak Securities, Morgan Stanley and Goldman Sachs.
     
    The deal size will be up to $900-918 million or Rs68-69,440 crore assuming deal size of 56 million equity shares or up to 2.83% of total equity shares outstanding as of May 31, 2020.
     
    Uday Kotak, as the promoter, is selling the stake. The pre-holding of the promoter group is 28.93% which will be reduced to 26.10% post the block deal.
     
    The deal objective of the sale of equity shares by Uday Suresh Kotak is to assist the Bank to progress towards compliance with Reserve Bank of India's requirement to reduce promoters' shareholding in the Bank to 26% of its paid up voting equity share capital by August 17, 2020.
     
    The floor price is Rs1,215-1240 per equity share. The discount range will be 0.7% discount (at top end of offer price range) and 2.7% discount (at floor price) to the close price of Rs1,248.40 as on June 1 on the National Stock Exchange of India.
     
    The discount range will be 1.5% discount (at top end of offer price range) and 3.5% discount (at Floor Price) to the VWAP price of Rs1,258.48 as on June 1, 2020 on the National Stock Exchange of India.
     
    The lock up stipulation is that the seller will not sell equity shares of the Bank for 60 days from May 29, subject to such restriction not being applicable on sale of equity shares of the bank by one or more members of the promoter group of the bank that progress towards the RBI's requirement to reduce the current promoter shareholding in the bank to 26% of the paid-up voting equity share capital of the company.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    SEBI Invites Comments on Social Stock Exchange-SSE for Listing Social Enterprises, NGOs
    Market regulator SEBI has invited comments from public on a report on Social Stock Exchange-SSE for listing social enterprise and voluntary organisations. 
     
    Following the announcement in the Budget, SEBI had formed a working group on SSE headed by Ishaat Hussain and consisting of representatives of the stakeholders active in the space of social welfare, social impact investing, representatives from ministry of finance, the stock exchanges and non-government organisations (NGOs). 
     
    SEBI says, "Social Stock Exchange-SSE is a novel concept in India. The working group had a series of consultation with various stakeholders including voluntary organisations, social enterprises and philanthropic organizations in order to assess the difficulties faced by them in raising funds and donating funds."
     
    Here are key recommendations submitted by the working group...
    • Non-profit organizations can directly list on SSE through issuance of bonds. 
    • A range of funding mechanisms have been recommended including some of the existing mechanisms such as Social Venture Funds (SVFs) under the Alternative Investment Funds. 
    • A new minimum reporting standard has been proposed for organizations which would raise funds under SSE. 
    • For-profit social enterprises can also list on SSE with enhanced reporting requirements.
    • To encourage "giving" culture, some tax incentives have also been recommended.
     
     
    SEBI says, public can send comments email to Yogita Jadhav, DGM ([email protected]) and Abhishek Rozatkar, AGM ([email protected]) by 30 June 2020.
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    COMMENTS

    tillan2k

    1 month ago

    do not permit buy back of shares by Companies like ESSAR or Adani borrowing to buy is unethical if group wants to buy back to delist make profit and then list like DLF it is not fair to large number of small share holders. pl intervene to stop disguised and deceitful practices by crony capitalists..
    pl ask multi baggers to totally separate the regulated and non regulated business and use regulated capex to invest in non regulated business. for better appreciation analyse the balance sheet of multibaggers like Torrent power, CESC , Adani, ESAAR . Tata Power analyse the balance sheet before they entered power sector and after plants were commissioned , analyse ratios, like return on assets, ROE for more analyses study Security Exchange Commission ( SEC USA ) and their hard regulation of power companies in (1935- 40 depression )

    Ramesh Popat

    1 month ago

    good news for MLF!?!

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