SC gives conditional nod to debt transactions by banks
The Supreme Court today temporarily allowed the banks to go ahead with transactions related to assigning of debts subject to final disposal of their petitions.india Updated: Feb 16, 2009 19:28 IST
The Supreme Court today temporarily allowed the banks to go ahead with transactions related to assigning of debts subject to final disposal of their petitions.
Three private banks - ICICI Bank, Kotak Mahindra Bank and Standard Chartered Bank - have moved the apex court challenging the Gujarat High Court judgement that banned trading in debts.
A bench headed by Justice S H Kapadia, while impleading the Indian Banks Association and RBI as parties, said that transactions/activities related to assignment of debts can continue provided ICICI Bank and Kotak Mahindra gave undertaking that in case their petitions are dismissed they would revert all the transactions. It also posted the matter for final hearing on April 14.
"It is made clear that in the event of dismissal of SLP, assignee and assignor will revert the transcation...," it stated.
However, it said that it will look into issues whether the transactions were legal and whether the defaulting company had the right to challenge the issue of assignment of its debts to other banks.