NEW DELHI: At a time, when a larger debate had begun on stressed assets and a delay in recognition of bad loans by banks, the Supreme Court on Tuesday sought more clarity from the Centre on the issue of tackling bad loans.
“The government will study these issues and file an affidavit,” a bench comprising Chief Justice of India T.S. Thakur and Justices A.M. Khanwilkar and D.Y. Chandrachud said seeking data from Centre on recovery cases filed by banks and financial institutions which are pending for last 10 years in debt recovery tribunals.
The court has asked the government to study if the deadlines under the SARFAESI Act and Bankruptcy Code can be complied with.
During the hearing, the bench had asked banks about disclosure of names of big loan defaulters in this case but today's ruling did not touch upon the issue.
Last year, while hearing the case, the court had observed that mere disclosure of names of debtors, who owe Rs 500 crore and more to banks, will not lead anywhere as the core problem that needs to be monitored is the accumulation of non-performing assets (NPAs).
However, Centre told the court that banks kept up their efforts to recover loans given to companies and individuals even after declaring these as non-performing assets (NPAs) or writing off the outstanding amounts.
Government’s response came to the queries by the bench while hearing a PIL on the issue of huge write-offs by banks amounting to lakhs of crores at the expense of other bank users, honest tax payers and the exchequer.
The hearing came on a PIL filed by CPIL asking the government as to why the names of those who had failed to return loans in excess of Rs 500 crore could not be disclosed.