Delhi HC Restores ‘status quo Ante” with respect to loan classified As NPA by Yes Bank amid COVID-19

The held that prima facie should not have classified a loan account as () when a delay in payment of instalment caused due to the condition brought by the worldwide Pandemic .

“Prima Facie, I am of the view that the classification of the account of the petitioner (company) as an NPA on 31 March 2020 could not have been done by the respondent (bank). Accordingly, is restored qua the classification of the account of the petitioner and the account classification as it stood on 1 March 2020 shall stand restored,” Justice Sanjeev Sachdeva ordered.

The court noted that restriction as per the RBI has stipulated that the account which has been classified as special Mention Account (SMA)-2 cannot be further classified as an NPA in case the instalment is not paid during the moratorium period, that is, between March 1 and May 31, 2020.

It claimed that due to the outbreak and spread of COVID-19, the economic condition was adversely affected.

READ ORDER HERE

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