Supreme Court to decide if RBI’s loan defaulters list can be disclosed or not
RBI submitted the loan defaulters list to Supreme Court in March this year in a sealed envelope, saying disclosing the names could have an adverse impact on businesses
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New Delhi: The Supreme Court will decide whether or not a list of big loan defaulters submitted by the Reserve Bank of India (RBI) can be disclosed after four weeks. The list was submitted to the court by RBI in March this year in a sealed envelope, and said that disclosing the names could have an adverse impact on businesses.
“There are a series of statutes that can be looked into to decide whether the disclosure can be made,” counsel for the RBI told the court.
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Taking this into consideration, a bench headed by chief justice J.S. Khehar said that the matter will be heard after four weeks.
The court on 16 February made the central bank a party “in public interest” to a 2003 case related to bad loans advanced to a few companies by state-owned Housing and Urban Development Corp. Ltd. The case was filed by the Centre for Public Interest Litigation, an activist organization headed by lawyer Prashant Bhushan.
The court had directed RBI to provide a list of companies that have defaulted on bank loans in excess of Rs500 crore and expressed serious concern over rising bad loans.
RBI cited reasons such as delays in securing clearances from government and regulatory agencies, completing acquisition of land, an unanticipated business cycle downturn and poor project execution, besides poor credit appraisal and monitoring by banks, for piling bad loans.
The court had earlier asked how state-owned banks and financial institutions were advancing large-scale loans without proper guidelines and whether there were adequate systems in place to recover them.