Just 57 individuals account for a whopping Rs 85,000 crore of bank loan default. The Reserve Bank of India (RBI) made this startling disclosure in a confidential report filed in the Supreme Court. The SC asked the RBI to submit by Friday why the names of these defaulters should not be made public. The court hinted that it may want to identify those persons who have defaulted on repaying loan of Rs 100 crore and above.
The Bench of Chief Justice TS Thakur, Justices DY Chandrachud and lN Rao found the figures too high to ignore even though the RBI disfavoured making public the names of defaulters in the interest of banks. Asking the RBI to think in the “interest of the country”, the Bench sought a reply by Friday.
Interestingly, the Centre did not take any position on this issue as it said that the matter involved the RBI and the banks and did not pertain to the Ministry of Finance. Appearing for the Centre, Solicitor General Ranjit Kumar submitted that on May 5, 2016, the Centre constituted a six-member committee to look into non-performing assests of banks and financial institutions.
As the endeavour of the court was to know how many persons have defaulted after obtaining loans of Rs 500 crore and more, the SC focused on the RBI report filed in response to a PIl filed by Centre for Public Interest litigation (CPIl). The PIl highlighted the scam in Haryana Urban Development Corporation, which sanctioned big-ticket loans to several individuals and groups. Most of these loans were not repaid. On the request of the SC, the RBI was made a party and asked to submit a report on loan defaulters.
After going through the contents of the report, the judges said, “There is an outstanding amount of Rs 85,000 crore against only 57 persons who have not repaid loans worth Rs 500 crore and more. If we calculate outstanding loans on Rs 100 crore and more, the figure may come to Rs 1 lakh crore or more.”
Advocate Prashant Bhushan, who appeared for the petitioner CPIl, said that this report should be made public to enable people to know the identities of such persons who have caused huge losses to the banks. The SC backed this demand and said, “We want to examine if this report of the RBI can be disclosed and if a further reports can be submitted by the RBI.” According to the RBI, not all defaulters mentioned in the list are “willful defaulters” as the banks are yet to write off the outstanding amounts as bad loans.