SC asks RBI why it opposes declaring names of defaulters who owe Rs 85,000 crore to banks
The central bank argued that the public revelation of the names would breach certain confidentiality clauses in law.
The Supreme Court on Monday asked the Reserve Bank of India why it opposed publicly declaring the names of defaulters who owe public sector banks Rs 85,000 crore in bad loans, The Indian Express reported. A bench of the court comprising Chief Justice of India TS Thakur and justices DY Chandrachud and LN Rao asked the central bank to work for the interests of the country and reveal the names of the defaulters.
“People should know how much money a person has borrowed and how much money he needs to pay back,” the bench said. “It does not matter whether they are wilful defaulters or not…people may have a right to know,” it added. However, the RBI argued that revealing the names would breach certain confidentiality clauses existing within the law, The Hindu reported. The central bank further said that not all those who had defaulted on their loan repayments had done so on purpose.
Solicitor General Ranjit Kumar said the Union government had nothing to say about the disclosure of the names because the matter was to be decided upon between the RBI and public banks. Kumar said that the report of a five-member committee examining the causes of bad loans and methods to recover them would be ready by the end of October. However, senior advocate Prashant Bhushan objected to the constitution of the committee, saying that three of the five members were managing directors of public banks. “They are the problems themselves,” he said. “How will they provide the solution or hold others accountable?”
The Supreme Court set the next hearing in the matter for October 28 and asked the RBI to prepare a decision on whether it intended to disclose the names of the defaulters. In August, Indian banks reported a 96% spike in non-performing assets to Rs 6,29,774 crore in June 2016 from Rs 3,20,553 crore during the same month last year. The data was made available after the Reserve Bank of India ordered an asset quality review.