Banking

RBI Says Loan Defaulters List Can’t Be Made Public; SC to Hear Matter in Four Weeks

The central bank said that making the list public would “hurt the business climate in the country and endanger the jobs of thousands working in these entities”.

The Reserve Bank of India (RBI) logo is pictured outside its head office in Mumbai May 3, 2011. Credit: Reuters/Danish Siddiqui

The Reserve Bank of India (RBI) logo is pictured outside its head office in Mumbai, May 3, 2011. Credit: Reuters/Danish Siddiqui

New Delhi: The Reserve Bank of India, on July 17, told the Supreme Court it was not in favour of publishing the list of loan defaulters who owe more than Rs 500 crores to public sector banks.

Stating that “the disclosure might involve the statutory, contractual and fiduciary rights of the defaulters,” it argued that the grant of loans was covered by various statutes and contractual obligations.

Senior advocate Jaideep Gupta, appearing for the RBI, told the bench of Chief Justice J.S. Khehar and Justice D.Y. Chandrachud, “It is extremely necessary to keep these names confidential due to their fiduciary relationship”. The bench is hearing a plea from the NGO Centre for Public Interest Litigation (CPIL), The Telegraph reported.

The CPIL had moved the court in 2003 pointing to bad loans advanced to a few companies by the state-owned Housing and Urban Development Corp Ltd, reported The Quint.

The court had earlier suggested the RBI make the list of defaulters public as the loans involved taxpayers’ money.

The names have already been submitted to the Supreme Court in a sealed cover.

The RBI had argued that making the list public would “hurt the business climate in the country and endanger the jobs of thousands working in these entities”.

According to The Telegraph, Justice Khehar, while directing the RBI to file an affidavit on the subject, asked solicitor general Ranjit Kumar to take instructions from the government whether such disclosure could be made in the light of the central bank’s objections.

He also told the court that the government has formed a committee to look into the matter.

Prashant Bhushan, counsel for the petitioner, urged the court to direct the RBI to reveal the names in the public interest, claiming that the list should be disclosed as the the central bank is covered under the Right to Information Act, reported The Telegraph.

This cloak on defaulters by the RBI has raised questions among people. @jamewils tweeted:

The RBI gave several reasons for piling bad loans. Delays in securing government clearances, completing acquisition of land and poor credit appraisal and monitoring by banks were some of them, reported Hindustan Times.

The apex court will take hear the matter after four weeks.