RBI gives loan defaulters list, urges SC not to reveal names

RBI gives loan defaulters list, urges SC not to reveal names

New Delhi, March 31

The Reserve Bank of India has submitted a list of major loan defaulters in a sealed cover to the Supreme Court, although it has requested the court to not make the names 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 Reserve Bank of India said in a recent affidavit submitted along with the list of defaulters.

"Disclosure of names of defaulters may have an impact on the livelihood of scores of employees employed in such entities," the RBI said.

A bench headed by Chief Justice TS Thakur had told the central bank to submit a list of companies that still had to pay back Rs 500 crore or more as rising bad debts in public sector banks in the country set alarm bells ringing.

The Supreme Court also asked the Reserve Bank of India to give them a list of companies whose loans have been restructured under corporate debt restructuring schemes.

It had asked how state-owned banks and financial institutions were advancing large-scale loans without following rules and whether there was adequate mechanism to recover them.

The court had made RBI party to a PIL filed in 2005 by an NGO Centre for Public Interest Litigation (CPIL), in which it had raised the issue of loans advanced to some companies by state-owned Housing and Urban Development Corporation (HUDCO).

Advocate Prashant Bhushan, appearing for CPIL, had submitted that about Rs 40,000 crore of corporate debt was written off in 2015.

The RBI’s affidavit said delayed permissions from government and regulatory agencies, delayed acquisition of land, delayed sanction of loans that made the borrower unable to use it in time, poor credit appraisal, poor monitoring, lack of business management knowledge, unanticipated business cycle downturn, commodity cycle downturn and poor project execution led to bad debts.

The Supreme Court has asked the central government to explain what action it would take against major defaulters who were leading a "lavish lifestyle".

The PIL, filed in 2005 through Bhushan, had alleged that the bad loans were those given by HUDCO to "ineligible borrowers".

The Supreme Court had ordered an inquiry by the Central Vigilance Commission (CVC), whose report concluded that the loans were given to the borrowers who had already been declared willful defaulters or having very bad track record, Bhushan had said.

Although the CVC had recommended departmental proceedings and a CBI investigation, the guilty officers were exonerated, he had claimed.

Bhushan had also referred to a recent news report about writing off of a total of Rs 1.14 lakh crore as bad debt between 2013 and 2015 by the PSU banks.  — PTI

Source:The Tribune