NEW DELHI: NEW DELHI: The Supreme Court on Monday questioned the Reserve Bank of India (RBI) asking why names of loan defaulters owing `500 crore or more can’t be made public. A Bench headed by Chief Justice T S Thakur said, “Who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to public.”
“People should know how much money a person has borrowed and how much money he needs to pay back. The amount payable should be known to public. Why should you withhold the information,” said the Bench. The Bench’s remark came after the RBI told the court that as many as 57 borrowers have defaulted on bank loans worth Rs 85,000 crore. RBI had submitted a report before the court about individuals who have taken loan of over Rs 500 crore and defaulted.
The Bench further added that if the bar was lowered below Rs 500 crore, then the default amount would cross over Rs 1 lakh crore. However, the RBI opposed the suggestion and said not all defaulters were willful and that the central bank is working in the interest of banks and names of defaulters cannot be made public as per the statute. The RBI cited Section 45E of the Reserve Bank of India Act that prohibits disclosure of any information relating to creditors and says “(1) Any credit information contained in any statement submitted by a banking company under section 45C or furnished by the Bank to any banking company under section 45D, shall be treated as confidential and shall not, except for the purposes of this Chapter, be published or otherwise disclosed.”
On this, the Bench said, “You (RBI) must work in the interest of the country, not just in the interest of banks.” Advocate Prashant Bhushan, appearing for NGO Centre for Public Interest Litigation (CPIL), favoured disclosure of the outstanding loan amount and cited an apex court verdict of December 2015 to claim that the RBI has to provide all information. The Bench then scheduled further hearing on Friday on the aspect of disclosure of names of defaulters.
Earlier, the court had expressed concern over the growing amount of loans not being returned and said people are taking thousands of crores and running away by declaring their companies insolvent, but poor farmers who take small amounts of Rs 20,000 or Rs 15,000 suffer. The Supreme Court had then directed the RBI to provide a list of companies which had defaulted bank loans of over Rs 500 crore while expressing serious concern over the growth in bad loans and had also asked the RBI to provide a list of companies whose loans have been restructured under corporate debt restructuring schemes.