May 10, 2016 5:17:57 am
THE Reserve Bank of India has indicated its willingness to share details regarding borrowers who have taken large loans of over Rs 5 crore with the government if such information were to be sought by vigilance and investigative agencies, or for court cases.
A database of loans of over Rs 5 crore is currently maintained by the Central Repository of Information on Large Credits (CRILC), which was set up the RBI last year. The repository has been set up to improve assessment of credit risk by the banks, early detection of non-performing assets (NPAs), and to improve recovery of loans.
While refusing to share the entire database of large loans with the government, the central bank will provide details as may be needed by the investigative agencies, Finance Ministry sources said.
Such information will enable these agencies to ascertain the entire credit history of large borrowers and help with investigation of loan cases where proper due diligence was not followed, they said.
The RBI set up CRILC in order to collect, store and disseminate information on large credits of banks and non-banking financial companies. CRILC collects information at one place and member banks can have access to this information. It enables banks to have a better view of the credit history and the status of all loans taken by the borrower.
Banks are also required to report Special Mention Accounts, where principal or interest is overdue for period up to 90 days, to the repository. Such loan accounts are classified as NPAs.
The Finance Ministry wanted access to the database to have a better view of large loans that are sanctioned and disbursed. Sources said private sector banks objected to the regulator sharing the entire information with the government, since the latter also being the owner of public sector banks has a conflict-of-interest in gaining data on commercial activities of its competitors.
Data from Cibil, the agency which collates information on credit, showed that 6,819 wilful defaulters owed banks Rs 74,699 crore until December 2015, up from Rs 22,332 crore that 3,703 wilful defaulters owed until December 2012.
The ratio of top 30 NPAs to NPAs above Rs 1 crore (large borrowers) as on March 2015 for scheduled commercial banks is 51.79 per cent, according to Finance Ministry data.
An amount of Rs 1,30,156 crore was classified as NPAs in PSBs for borrowers exceeding Rs 500 crore as on December 2015, the data shows.
Last month, the RBI submitted to the Supreme Court a list of defaulters owing Rs 500 crore or more to public sector banks just three months after the apex court ruled that the RBI is “clearly not in fiduciary relationship with any bank” and that it cannot hide information solely because of the embarrassment it may cause.
But while submitting the list, the RBI said it was “extremely necessary” to keep these names confidential otherwise it would dent the “fiduciary relationship” between the RBI and the banks, and between the banks and customers.
The RBI’s affidavit was filed in response to a reply sought by a bench led by Chief Justice T S Thakur, which had in March taken suo motu cognizance of The Indian Express report that Rs 1.14 lakh crore of bad loans had been written off by state-owned banks between 2013 and 2015.
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