#loan restructuring

The Kerala High Court has ruled that banks may allow borrowers to clear SARFAESI-triggered arrears in structured installments, provided they continue regular EMIs, effectively suspending coercive recovery actions. This sets a precedent for judicial intervention in debt restructuring where borrowers demonstrate willingness to repay, balancing creditor rights with borrower dignity under Article 21.

Himachal Pradesh High Court rules that RBI’s 2013 Master Circular on loan restructuring due to natural calamities is legally binding on cooperative banks, mandating relief even if initially denied. The judgment reinforces RBI’s regulatory authority over cooperative banks and ensures borrowers affected by disasters receive statutory protection against NPA classification.

The Himachal Pradesh High Court stayed a bank's auction of a disabled borrower's land, ruling that rigid contractual enforcement cannot override constitutional guarantees of procedural fairness and dignity. The court directed the bank to consider the borrower's repayment proposal, reinforcing that disability and financial incapacity must be factored into recovery proceedings under the SARFAESI Act.

Bombay High Court holds that co-operative banks must refer MSME loan defaults to RBI's revival committee before initiating recovery, affirming statutory protections under MSME Act.