The demand is presumably premised on the argument that the relaxation in the norm will make the banks' financials look better, allow them to reserve less, conserve capital, and may even allow them to offer more credit (or at least not cut back on credit). However, there are several forceful arguments against the relaxation sought. Let me mention a few.
(i)  Delay in recognition of NPL removes pressure on the banks to deal promptly with the problem. History suggests that delayed recognition of impairment in the value of the assets makes the problems only worse. The sooner banks restructure the loan (through, say, CDR mechanism) or, where appropriate, send the loan for collection, the better.