RBI gives list of Big Defaulters

list to SC, says to keep it secret

The Times of India
30 March, 2016 - Wednesday

New Delhi : The Reserve Bank of lndia on

Tuesday submitted to the Supreme Court
a list of big defaulters who have failed to
repay loans of over Rs 500 Crore but
fervently pleaded that their names
should not be made public.
Disclosing details of accounts where
defaults have been found irrespective of
the reasons for no-repayment may have
adverse impact for business and in a way
may accentuate the failure of business
rather than nursing it back to health, the
RBI said in its affidavit submitted along
with the list of defaulters in a sealed
cover
An SC bench headed by Chief Justice T S Thakur had last month demanded a list of big
defaulters from the RBI, while hearing a 13-year-old PIL filed by NGO Centre for
Public Interest Litigation alleging massive increase in non-performing assets of
public sector banks because of routine waiver and restructuring of loans. The bench
had taken exception to the prevailing banking atmosphere where big corporate
house owners defaulted repaying thousands of Crores of rupees taken as loan, yet
were enjoying their lives personally.
A newspaper had recently obtained data through RTI Act to report tha 329 State
owned banks had written off Rs 1.14 lakh crore of bad debt between 2013 and 2015.
The bad debts written off between 2004 and 2015 was Rs 2.11 lakh crore, according
to the report.
In response to the SC query the RBI said loan default happened due to a variety of
reasons including delayed permissions from government and regulatory agencies,
delayed acquisition of land, delayed sanction of loans which made the borrower
unable to use it in time, poor credit appraisal, poor monitoring, lack of business
management knowledge, unanticipated business cycle down turn, commodity cycle
downturn and poor project execution.
It said defaults happened even when the borrower had the best of intent. Disclosure
of names of defaulters may have an impact on the livelihood of scores of employees
employed in such entities, it said, adding that such information was shared between
the banks to help identify bad borrowers and dissuade them from taking loans.
Disclosing personal information which is fiduciary in nature with regard to banks by
a statutory body would defeat the very purpose of having fiduciary responsibility on
the part of banks. For these reasons, it is extremely necessary to keep the
confidentiality of the information provided along with this affidavit, the RBI said.
Details of restructured accounts involving more than Rs 500 crore is available with
RBI only Hom June 2014. Data pertaining to previous period is not available, it said.
The RBI also gave details of bad debts written off in the last five years and said banks
write off loans periodically to clean up their balance sheets in the course of normal
business.
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