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SC rebukes RBI on loan defaults, says ‘rich escape while farmers penalised’

India TV Business Desk 12 Apr 2016, 15:02:13 IST
India TV Business Desk

New Delhi: The Supreme Court today pulled up the Reserve Bank of India after it claimed that the details of the loan defaulters can not be revealed.

The court said the rich are ‘taking thousands of crores and running away’ while poor farmers are being penalized.

"You are the watchdog, a regulator. On one hand people taking thousands of crores, running empires and turning insolvent and the matter goes on. On the other hand a farmer takes a few thousands of rupees and if he is unable to repay the loan, his property is attached," the SC bench comprising Chief Justice TS Thakur and Justice R Banumathi said.

The apex court said that it is favour of making public the total amount of outstanding loans given by banks to various individuals and entities and running into lakhs of crores of rupees as per the information provided to it by RBI in a sealed cover.

"This information does make out a case. This is quite a substantial amount which is involved," the bench observed.

However, this was opposed by the RBI which said there was a confidentiality clause and the figure will have its own impact if it is disclosed.

Noting that the issue was important, the bench said it will examine if the total amount of defaulting loans running into crores of rupees can be disclosed and asked the parties involved in the matter to frame various issues that could be debated.

The bench, which expanded the scope of the PIL, impleaded Ministry of Finance and Indian Bank's Association as parties posted the matter for further hearing on April 26.

The petition, which was filed in 2003 by NGO Centre for Public Interest Litigation (CPIL), had originally raised the issue of loans advanced to some companies by state-owned Housing and Urban Development Corporation (HUDCO). The plea had said that about Rs 40,000 crore of corporate debt was written off in 2015.

Earlier, the Supreme Court had directed the RBI to provide a list of companies which are defaulters of bank loans of over Rs 500 crore while expressing serious concern over the rise in bad loans.

The apex court had also asked the RBI to provide within six weeks the list of companies whose loans have been restructured under corporate debt restructuring schemes.

The bench had expressed surprise that no concrete steps were taken for the recovery of loan from the defaulters. While passing the order, the court had taken note of a report in a national daily about bad loans or non-performing assets (NPA) and the inability of the banks to recover them.

(With PTI Inputs)