Publicly expose huge amounts owed by defaulters: SC

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Agencies

New Delhi, April 12: If confidentiality prevented it from revealing the names, the RBI should atleast publicly expose the defaulted “huge and substantial amounts” taken as bank loans by the rich, the Supreme Court said on Tuesday.

“People taking thousands of crores to run their empires and then later declare insolvency only to take more loans from other sources. This, when poor farmers are driven to suicide unable to pay their small debts,” Chief Justice of India T.S. Thakur observed.

The Supreme Court said it would hold detailed hearings on whether confidentiality between banks and their rich customers would prevent itfrom passing a judicial order to reveal the details of the “very substantial debt amounts” of those who had taken over Rs. 500 crore loans from banks.

The Bench, also comprising Justice R. Banumathi, issued notice to the Indian Banks Association and the Ministry of Finance.

“We want you to formulate issues by April 26. We will have a focussed and articulate debate on these issues. Primary question is whether there is any confidentiality on information relating to outstanding debts over Rs. 500 crore,” Chief Justice Thakur said.

The court was hearing a PIL filed by the NGO, Centre for Public Interest Litigation, seeking full disclosure of names and details of those who had defaulted after taking over Rs. 500 crore loans.

The RBI had provided the list of defaulters to the court in a sealed cover.

“Can the total amounts in default be disclosed? We can keep the names of the defaulters confidential, but total amounts can be disclosed…” Chief Justice Thakur told the RBI.

RBI counsel responded that the information was obtained by it in a fiduciary capacity and any exposure will have an impact on the country’s economy and reduce confidence within the business and investment sector.

“The amounts outstanding is very large… the next question we would ask is what steps are you taking to recover them… Also what about the status of non-performing assets?” the CJI said.

The RBI said any disclosure would be violative of the provisions of the RBI Act, Credit Information Companies ( Regulations) Act, 2005 and a 1983 law on fidelity and secrecy in public financial situations.

Representing the NGO, advocate Prashant Bhushan countered that there was no requirement for a cloak of secrecy to favour the defaulters. He submitted that a 2015 judgment of the Supreme Court had favoured transparency than secrecy.