April,12,2016:
SC to examine if Name and Shame can be done with defaulters who owe Rs 500 crore or more to Banks.
The Supreme Court today decided to examine the claim of confidentiality made by RBI which stands in the way of disclosure of names of who have Rs 500 crore or more against them.
Pursuant to an earlier order, RBI today handed over a list of defaulters of loans and the amounts standing against them. RBI has claimed confidentiality about the data handed over to the bench headed by Chief Justice T S Thakur.
The Chief Justice said that even if the names of the defaulters are not disclosed, the huge aggregate figure can at least be disclosed.
"There is no confidentiality in figures; but the names may be kept out," he observed.
However, RBI counsel Jaydeep Gupta was not agreeable to it and submitted that "the disclosure of aggregate figure may have an impact on the economy".
Prashant Bhushan, counsel for Centre for Public Interest Litigation, who moved the petition, argued that RBI was flouting the order of the court made in December last in which all the arguments of confidentiality were rejected.
The court therefore asked all the parties to formulate the issues for a full hearing on April 26 when the issue of confidentiality will be the main focus.
The court issued notice to the Finance Ministry and the Indian Banks Association so that they could also put forth their viewpoints. RBI argued that there is more and more decentralization of the functions of the central bank and therefore it was a "herculean task" for it to get data from all banks.
RBI does not interfere in the day-to-day functions of the banks, the counsel said. He quoted laws like Credit Information Regulation Act of 2005 and similar Acts and regulations which grant immunity from disclosure of details of non-performing assets.
The Chief Justice observed that big defaulters were running away with huge NPAs while the farmers are being harassed for small loans. "We would like to be satisfied with the steps taken by RBI. If the banks do not act prudently, there is no hope of recovering loans," he added.
Prashant Bhushan countered the RBI's claim of confidentiality pointing out that the Supreme Court in December had dismissed the central bank's appeal which raised all contentions based on fiduciary relationship and confidentiality. It was a case of RTI application seeking disclosure of the NPAs with the banks.
The Central Information Commission had directed RBI to disclose the details to the person who applied for it. But RBI moved the Supreme Court with various arguments, which were ultimately rejected in a detailed judgment. Counsel said RBI was not raising any new point. Bhushan remarked in a light vein that he thought the present Governor of RBI was a "good man" but he has filed a two-page affidavit blocking the disclosure of the names of the defaulters.
Bhushan further said that after the December judgment on RTI disclosure, RBI has written to the banks not to report NPAs to it, thus absolving itself of all responsibility. RBI counsel countered that the earlier judgment allowed disclosure of NPAs in individual cases, but not "wholesale", as demanded by Bhushan.
Since the issue of disclosure of names and the figures became the focus of the proceedings, the court asked all the parties to formulate their stand and bring suggestions on the contentious issue and posted the case for further action on April 26. BS
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