SC asks RBI: 87 owe Rs 85000 crore, why not make their names public

Opposing the disclosure of names, counsel appearing for the RBI argued that there are some clauses of confidentiality in law that might not support such disclosure.

Written by Utkarsh Anand | New Delhi | Updated: October 25, 2016 4:03 am
RBI, Supreme court, RBI Supreme court, SC to RBI, PSBs, Public sector banks, Reserve bank of india, TS Thakur, CJI TS Thakur, Cheif Justice of India, RBI Governor, Raghuram Rajan, bank loans, Bank loan corruption, business news, indian express news Supreme Court. (File Photo)

Underlining that 87 persons owe more than Rs 85,000 crore to public sector banks (PSBs), the Supreme Court said on Monday that the Reserve Bank of India (RBI) should not work in the interest of the banks but in the interest of the country which calls for disclosing the names of the biggest defaulters.

After going through a list of defaulters submitted in a sealed cover envelope by the RBI, a bench led by Chief Justice of India T S Thakur disclosed that there are 87 individuals who owe Rs 500 crore or more to the banks and bad loans on account of their default to repay totalled Rs 85,000 crore.

Watch what else is making news:

“See this amount…if we had asked for details of those who owe Rs 100 crore, this could be another Rs 1 lakh crore…why should we not put the names of these defaulters in public domain? The RBI publishes a list of wilful defaulters every year. It does not matter whether they are wilful defaulters or not but they certainly owe Rs 500 crore and more to the banks… people may have a right to know,” said the bench, also comprising Justices D Y Chandrachud and L N Rao.

RBI was asked to explain the huge amount of loans written off by PSBs in the last five years after the top court took suo motu cognizance of The Indian Express report dated February 8, 2016, that Rs 1.14 lakh crore had been written off as Non-Performing Assets (NPAs) by 29 state-owned banks in the last three years.

Arguing in connection with a PIL over alleged irregularities in advancing loans by the Housing and Urban Development Corporation Limited, advocate Prashant Bhushan had adduced a copy of the report on bad loans and write-offs published by The Indian Express.

Opposing the disclosure of names, counsel appearing for the RBI argued that there are some clauses of confidentiality in law that might not support such disclosure. But the bench shot down this argument, saying: “What confidentiality? You have borrowed money from a public sector bank and you are not paying back. How is that confidential? And how does that affect the RBI? It may affect the credibility of the person concerned if people know he owes such huge sums but why should RBI be concerned? We will make it clear all of them are not wilful defaulters but their names should become known to public.”

The RBI’s counsel, however, responded that the Indian Bank Association was also a party to the case and they, being a representative body of management of banking in India operating in India, should be given an opportunity to put forth their stand on why disclosing the names is not the right option. “RBI is only working in the interest of these banks. We only supervise,” he said.

At this, the bench retorted: “You should work in the interest of the country and not in the interest of the banks. Disclosure of information regarding bad loans running into crores is in the interest of the country. People have taken money and they are not paying back. You should ask them to pay back. That is in the interest of the country.”

Asking the RBI counsel to prepare well for the arguments, the court fixed the hearing on Friday, saying it would take a call on disclosing names of the biggest defaulters of bad loans. “We will examine this on Friday and you come prepared for arguing. Why should their names be withheld? You will have to explain why should we hide this information from public which definitely has an interest in knowing who are these people,” it said.

Solicitor General Ranjit Kumar said that the Union Government had nothing to say about disclosing the names since it was a matter between the RBI and the PSBs. On the aspect of examining the causes of bad loans and the mechanism to recover, he said that a five-member committee had been set up in May and the final report is likely to be ready by end October.

Bhushan, however, objected to the constitution of the committee, pointing out that three of the five members were Managing Directors of the PSBs. “They are the problems themselves. It is under their regime that the problem has occurred. How will they provide the solution or hold others accountable? There must be some independent financial experts or retired senior banking personnel,” he said.

When asked by the bench, Bhushan said that somebody like former RBI Governor Raghuram Rajan could be made a part of this committee. But the bench responded: “He was also here for four years as RBI chairman when all this happened like the other MDs of banks…and now he is in Chicago. We cannot ask him to come back now. Let this committee prepare a report and submit it to us by November 15 and then we will see what additional directions are required.”

 

For all the latest India News, download Indian Express App now

  1. U
    U N
    Mar 13, 2017 at 9:51 am
    Not disclosing names will be favor to them .Why RBI and govt should favour them who are defaulter
    Reply
    1. G
      GandhiSpeaks
      Oct 24, 2016 at 11:17 pm
      Who is RBI shielding, and why? The Chairmen and Board of Directors are like Politicians. Corrupt and invincible. Can't touch them. They are all in it together.
      Reply
      1. J
        Jim
        Oct 24, 2016 at 8:03 pm
        My lords want to just shoot in the dark. Scattergun approach. What is the logic in SCs g standing?lt;br/gt;These are business loans not personal loans. if the said people don't take those loans and business risk, there wont be jobs. My lords will have a job anyways. People will suffer.
        Reply
        1. J
          Jam
          Oct 25, 2016 at 8:01 am
          It's no wonder that inflation is rampant, people buy gold in India, and the exchange rate is down the tubes despite monetary easing in the rest of the world. I pity the folks that saved their hard earned money in banks for paltry interest rates.lt;br/gt;lt;br/gt;This is what you get by blindly supporting BJP or Congress.
          Reply
          1. S
            SubbuI
            Oct 25, 2016 at 6:23 am
            HOW THE NALAYAK NMODI AND ARROGANT JAAT LI WILL ALOW RB TO DICLOSE THE NAME.THEY DO EVERYTHING IN THEIR POWER TO STPO THE DICLOSURE AND WILL GO TO THE EXTEND OF DEFYING SUPREME COURT " BECAUCE" ALL THESE DEFAULTERS ARE BJP ELECTON FUND DONERS .TO THE TUNE OF 50000 CRORES. MOSTLY THEY ARE GUJRATH and MARWAD BUSSINESS MAN.SHAME ON THIS GOVERNMENT
            Reply
            1. S
              Subhash
              Oct 25, 2016 at 1:52 am
              Along with they should slap post name of sanctioning authority and authority who did not took action to recover . Also disciplinary action has to be initiated against them
              Reply
              1. P
                Pissgt;Ongt;Brahmans
                Oct 25, 2016 at 12:05 am
                Welcome to world of business. If you form an LLC, that enles the director of the company to buy gold jewelry for wife in the name of company expense. So now don't you want to know who those businesses are?
                Reply
                1. V
                  VicRattlehead
                  Oct 25, 2016 at 5:06 pm
                  Pubic sector banks need to survive for this nation state to survive. Disclose the names and punish these corrupt crooked financiers and power consolidators!
                  Reply
                  1. A
                    AJ
                    Oct 25, 2016 at 5:26 am
                    Yes, make the names public. People have the right to know who looted tax payers money.
                    Reply
                    1. V
                      Virendra Sason
                      Oct 25, 2016 at 5:10 am
                      सरकार नाम उजागर क्यों नहीं करना चाह्ती ? क्या डिफाल्टर बीजेपी वालों के हमनिवाला तो नहीं। बात है आम आदमी के पैसों पर कॉर्पोरेट हाउसेस मौज मना रहे है। Silent means half consent.
                      Reply
                      1. H
                        Harikrishnan
                        Oct 25, 2016 at 7:27 am
                        Supreme court also makes many stupid observations and this is one of them. Only people who are in business only will understand why defaulters name should not be displa in public. Business especially big ones, take loans in thousand of crores and employ it productively and gives jobs to many 1000s and cores in revenue to the governments. Most of them run and pay back the loan and pay more. Some of them fail. Businesses are like that (like movies), however experts you are, you could still fail. However all the parties involved still try to revive it. This process of reviving is completely blocked if the names of defaulters are published, which will result in completely blocking their operations. Supreme court and all courts have lakhs of cases pending with them and they should focus more there.
                        Reply
                        1. H
                          Harikrishnan
                          Oct 25, 2016 at 7:31 am
                          To add further to my comments above, how many of us can know what to do if bank give us, let us say, a loan of 1000 crore to be used to build a business and pay it back?
                          Reply
                          1. A
                            Anil Bharali
                            Oct 25, 2016 at 1:16 am
                            Pm Modi is on transparency litmus test. Let us see how sincerely committed our PM Modiji against the black money holders outside country ??
                            Reply
                            1. A
                              AJ
                              Oct 25, 2016 at 4:57 am
                              Under IDC Modiji wants to now make surgical strikes on lakhs of small traders. Complete scheme resulted in collection of 65000 crores as per gov data. Now see these stats- 87 owes 87000 crores and no surgical strikes on these? none on Mallya? why?
                              Reply
                              1. V
                                vijay
                                Oct 25, 2016 at 2:17 am
                                It is a nice wish if it is granted but when it is the fence that is eating the crops do you think the fence will prosecute itself? Hardly think so.It will take generations of education and changes in atudes to stop this.Only if indians realise that multi crores are not needed to feel good.
                                Reply
                                1. V
                                  vijay
                                  Oct 24, 2016 at 4:25 pm
                                  There is a small possibility of naming and shaming very rich and very powerful friends and a large probability of conflict of interest therestead of asking. may be the courts must tell them.
                                  Reply
                                  1. S
                                    skvarul
                                    Nov 15, 2016 at 11:36 am
                                    RBI is nothing but the Central Govt, so why not Modi can release, if he is real in block money eradication
                                    Reply
                                    1. A
                                      arc
                                      Oct 24, 2016 at 5:10 pm
                                      Three if the biggest defaulters are big Gujju industrialists and own the govt of India.
                                      Reply
                                      1. Q
                                        qwerty
                                        Nov 16, 2016 at 6:56 pm
                                        Why did the SC not release the list then and there ?
                                        Reply
                                        1. A
                                          ashok
                                          Oct 24, 2016 at 6:26 pm
                                          RBI is the main culprit supporting defaulters shame on the governor for advising not to name.Supreme court should not delay and immediately publish the name of defaulters.IBA is another organization which supports these rich people who have not pa the loan back
                                          Reply
                                          1. A
                                            Ashok Jaisinghani
                                            Oct 26, 2016 at 10:50 am
                                            ★★★★★How can the RBI agree to disclose the names of the BIG THUGS who DON'T WANT to return the MIVE LOANS totalling Rs85,000 crore? Can the BIG BANDITS of the RBI dare to EXPOSE the EXTREMELY CORRUPT Bank Officers and the TOP POLITICAL LEADERS who had received the BIG BRIBES of MANY HUNDRED CRORES of RUPEES for sanctioning the MIVE LOANS of Rs85,000 crore to the BIG THUGS who have NO INTENTION of returning the money belonging to ALL the PEOPLE of India?★★★★★
                                            Reply
                                            1. Load More Comments