Political Economy

What Action was Taken on Rajan List of High-Profile NPAs, CIC Asks PMO and Finance Ministry

The information commission also slapped a show-cause notice on RBI governor Urjit Patel for not disclosing a list of wilful bank loan defaulters.

New Delhi: The Central Information Commission (CIC) has asked the Reserve Bank of India (RBI), the prime minister’s office (PMO) and the finance ministry to explain what action was taken on a letter sent by former central bank governor Raghuram Rajan to the Modi government in 2015.

The CIC’s order on the ‘Rajan letter’ – a list of high-profile fraud NPA (non-performing asset) cases that the former central banker felt required a multi-agency probe – comes a week after The Wire reported how the PMO and the finance ministry refused to provide any information with regard to the letter.

The Wire had filed a right-to-information (RTI) request to all three parties, asking for more information on when the letter was sent, received and the consequent action that was taken.

In response to the inquiry, the RBI acknowledged that the list sent by Rajan was “currently under investigation by many government and external agencies”, but did not provide further details on the status of how each high-profile NPA fraud case was being probed.

The other two parties went one step further and refused to divulge anything, with the PMO noting that the information that was requested was in the form of a “roving inquiry” and thus did not come under the “definition of ‘information’ under Section 2(f) of the Right to Information Act”.

The CIC’s order – which came on a plea filed by activist Sandeep Singh Jadoun, who was asking for information on wilful defaulters – references The Wire’s article and asks all three bodies to come clean on what action was taken after the letter was sent. 

“The commission directs the CPIOs of the RBI, the PMO and office of the Finance Minister to explain the action taken on the alerting letter written by Former Governor of RBI Raghuram Rajan on February 5, 2015, before November 16, 2018,” the order notes.

All names of wilful defaulters

The information commission also directed the central bank to disclose the bad debt details of defaulters worth more than Rs 1,000 crore immediately and all others whose defaults exceed Rs 50 crore within five days.

It has also pulled up RBI governor Urijit R. Patel, holding him to be a deemed public information officer, for non-disclosure under the Right to Information Act.

Patel has been slapped with a show-cause notice and asked to explain before November 16 why maximum penalty should not be imposed upon him for not revealing information about wilful defaulters.

In his plea, Jadoun had demanded to know if the loans to the wilful defaulters were given with or without guarantees, the names of guarantors, details of loans such as dates of sanction and default, and details of non-performing asset (NPA) accounts. He had moved the commission after failing to get the desired information from various central ministries and RBI.

“The commission feels that there is no match between what RBI governor and deputy governor say and their website regarding their RTI policy, and great secrecy of vigilance reports and inspection reports is being maintained with impunity in spite of the Supreme Court confirming the orders of the CIC in the Jayantilal case”, Central Information Commissioner M. Sridhar Acharyulu said.

In his order, Acharyulu also recalled how the RBI had “lost all their cases and contentions” when they had moved the Supreme Court against the directions of former CIC Shailesh Gandhi. Calling upon administrative officers of CIC to pursue these contempt of court cases against top management of RBI, he also asked: “If the banking regulatory like RBI will not honour the constitutional directions, what will be the effect of constitution on securing rule of law?”

Acharyulu also made a fervent appeal to the RBI governor – to remember the farmers who die as they fail to repay their debt – “before defying the transparency law and directions”. He also asked Patel to immediately discontinue the non-disclosure policy saying it would seriously harm the economy of the nation. As per the National Crime Records Bureau, in 2015 along over 3,000 farmers had committed suicide across the country as they were unable to repay their loans.

In his order, Acharyulu also wrote how RBI had earlier disclosed, in response to an RTI application, that bad debt stood at Rs 15,551 crore for the financial year ending March 2012. And that it had shot up by over three times to Rs 52,542 crore by the end of March 2015.