Give names of Rs 500-crore loan defaulters, apex court tells RBI

Last Updated 16 February 2016, 19:33 IST

The Supreme Court on Tuesday asked the RBI to disclose names of defaulters with loans of Rs 500 crore or more within six weeks in a sealed cover.

The apex court frowned over some people who owe public sector banks and financial institutions thousands of crores but are leading a lavish life.

A three-judge bench presided over by Chief Justice T S Thakur took cognisance of a news report that Rs 1.14 lakh crore bad loans have been written off by state-owned banks between 2013 and 2015 fiscal.

Advocate Prashant Bhushan, appearing for NGO CPIL in connection with a PIL filed in 2003, contended irregularities in advancing loans by the Housing and Urban Development Corporation Limited (HUDCO). He referred to a news report published by the Indian Express on February 9, based on an RTI response.

“People are owing thousands of crore to the public is a big fraud. Top 10 public sector banks have written off Rs 40,000 crore alone in 2015. It is all there in this report. Public financial institutions are lending money despite knowing of no returns. The RBI is supposed to keep a watch on these banks. What are you doing about it?” the bench asked Solicitor General Ranjit Kumar.

Kumar said that the government was taking sufficient steps under the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act), where banks can recover loans in cases where Non-Performing Assets (NPAs) are backed by securities charged to the bank by way of hypothecation or mortgage or assignment.

Bhushan also questioned the corporate restructuring of loans scheme wherein the defaulters are again given money to pay off loans. To make matters worse, he said, the RBI was not ready to disclose the names of such defaulters.

The bench, also comprising Justices R Banumathi and U U Lalit, then asked a counsel, who used to appear for the RBI, “What are you doing? You are supposed to keep a watch on these banks.”

(Published 16 February 2016, 19:33 IST)

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