New Delhi(PTI): The Supreme Court on Wednesday refused to vacate its order staying the Centre's…
NEW DELHI: The Supreme Court (SC) on Tuesday told the Reserve Bank of India (RBI) that it should at least expose the amount of defaults if it can’t name the defaulters.
“If confidentiality prevented it from revealing the names, the RBI should at least publicly expose the defaulted huge and substantial amounts taken as bank loans by the rich,” the SC said.
“People (are) taking thousands of crores to run their empires and later declare insolvency only to take more loans from other sources. This is when poor farmers are driven to suicide, unable to pay their small debts,” Chief Justice T S Thakur observed.
Earlier this month, the RBI had provided a list of defaulters to the court in a sealed cover and told the court not to disclose the names.
During the argument, the RBI submitted 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.
Any disclosure would violate the provisions of the RBI Act, Credit Information Companies (Regulations) Act, it said.
However, Justice Thakur said: “Can the total amounts in default be disclosed? We can keep the names of the defaulters confidential, but total amounts can be disclosed. The outstanding amount is very large and what steps are you taking to recover them?”
Seeking a response from the Indian Banks’ Association (IBA) and the ministry of finance, the apex court said it would hold the detailed hearings on whether confidentiality between banks and their rich customers would prevent it from passing a judicial order to reveal the details of the “very substantial debt amounts” of those who had taken over Rs 500 crore as loans from banks by April 26.
The bench said it will examine the issue whether there is any confidentiality on information relating to outstanding debts above Rs 500 crore.
The court was hearing a PIL filed by NGO, Centre for Public Interest Litigation (CPIL), filed through advocate Prashant Bhushan, seeking full disclosure of names and details of those who had defaulted after taking loans worth over Rs 500 crore.
Bhushan countered the bank’s argument, saying that there was no requirement for a cloak of secrecy to favour the defaulters.
“Are you (RBI) not supposed to keep a vigil and supervise how the loans have to be recovered. In how many cases you have taken action against those who have run away? the bench asked the RBI counsel, who said “action has been taken”.
When the hearing was nearing the end, Bhushan referred to RBI governor Raghuram Rajan, saying “I thought that the present RBI governor is a good man but I am surprised with the type of affidavit filed by the RBI.”
He also criticised the RBI governor for issuing the circular not to disclose the list of wilful defaulters.
The bench stopped him short and said: “That does not make him a bad man.”