The Central Information Commission has directed the Reserve Bank of India to make public the names and other details of top 100 industrialists of the country who have defaulted on loans from public sector banks. The Commission also directed the central bank to post on its website complete information on all such industrialists as part of suo motu disclosure mandated under section four of the RTI Act before December 31 and asked it to update it every year.
The RBI had objected to making this information public saying it is held by it in fiduciary capacity and disclosing it would adversely affect economic interest of the state.
Information Commissioner Shailesh Gandhi agreed that information is fiduciary in nature but said that such exemption does not stand when there is larger public interest in the disclosure.
“There can be no doubt that the information on defaulters received from banks are held by the Reserve Bank in a fiduciary capacity and are confidential in nature,” an RBI official had said while responding to an RTI application from P.P. Kapoor of Panipat, Haryana.
Mr. Kapoor had sought to know from the RBI the details of default in loans taken from public sector banks by various industrialists besides list of defaulters, top 100 defaulters, name of the businessman, address, firm name, principal amount and interest, date of default and date of availing loan.
During the hearing, Mr. Gandhi asked the RBI if the information about loan defaulters is held by it as part of statutory requirements. The Public Information Officer admitted that the Banks were providing the information in fulfilment of statutory requirements.
Mr. Gandhi in his detailed order said, “In fact, information about industrialists who are loan defaulters of the country may put pressure on such persons to pay their dues. This would have the impact of alerting citizens about those who are defaulting in payments and could also have some impact in shaming them.”
He said there is no doubt that details of top industrialists who have defaulted in repayment of loans must be brought to the citizens’ knowledge and there is certainly a larger public interest that would be served on disclosure of the same, hence clause of fiduciary information does not stand.
“This (disclosure) could lead to safeguarding the economic and moral interests of the nation. The Commission is convinced that the benefits accruing to the economic and moral fibre of the country, far outweigh any damage to the fiduciary relationship of bankers and their customers if the details of the top defaulters are disclosed,” he said.
He said the Commission is aware that information on defaulters is being shared by Reserve Bank with an organisation called CIBIL adding that “it is difficult to understand the reluctance to share this information with citizens using RTI”.
The Commission also rejected the contention that disclosure would adversely affect economic interest of the state saying “if it means that such borrowers would not bank with public sector banks for fear of exposure, it would in fact be in the economic interest of the nation.
“It is also unlikely that the economic wellbeing of the nation could get affected adversely by disclosing the names and details of defaulters. The Indian economy is dependent on far stronger footings,” he said.
we required more information regarding defulter bank loan with name of co
director\partner name
it is required for our international projects in economics changes in developments
sbi group of Co projects
RBI CONTENTION IS HIGHLY IRRESPONSIBLE AND SUPPRESSION OF FACTS TO PUBLIC, WHO ARE THE TAX PAYERS. IN FACT, THE PROTECTION IN THE NAME OF SECRECY GIVEN DEFAULTERS IN TAX, BANKS AND OTHER GOVERNMENT AGENCIES SHALL BE TREATED AS ACT AGAINST THE STATE INTEREST AND OFFICIALS SHALL BE CHARGED. EVERY SIX MONTHS ONCE ALL THE DEFAULTERS LIST SHALL BE PUBLISHED. IT IS SHAMEFUL TO HIDE UNDER CERTAIN IMAGINARY REGUALTIONS WHILE EVERY DAY, DEMAND NOTICE, POSSESSION, AUCTION NOTICES ARE PUBLICALLY EXPOSED.
NOW ALL INDIAN/FOREIGN BANKS INDIAN BRANCHES SHALL BE DIRECTED TO RELEASE THE LIST OF ALL LARGE DEFAULTERS, WHEN THEY HAVE POWER AND PLEASURE TO PUBLISH PAGES OF LOAN DEFAULTERS WITH 20 LACS REPAYMENT 14 LACS REPAYMENT.
Sir,
CIC’s approach is illogical, rather juvenile. RBI’s stand is appropriate and wise. The law does not favour such disclosures and rightly so. Basically, the 30 days limit for loans becoming “out of order” and 90 days for NPA recognition is unfair. It is essentially western concept where banks essentially lend for short term only. These rules are too harsh in Indian conditions. (but still welcome as the banks are forced to make provisions and gain strength which is always better than handing over the money to Govt. by way of taxes and dividends. That is over and above the loot in the name of SLR (low yield Govt. Bonds) and CRR (zero yield for banks).
Media reports show that our share market is tumbling everyday and so is our Rupee. Can anyone tell me why it is so. No clue. Nothing so serious has occurred within the Indian borders. These days anything may happen just because someone in Europe sneezed or someone in USA lost a job. When such minor things happening in far off lands are able to affect the industry and trade in India, blaming solely the companies / managements for the loans turning in to NPAs would not be wise.
Sorry for digressions. Coming back to NPAs, and whether RBI or CIC should be allowed to publish the names. I will again say an emphatic No ! Why ? Primarily because it is presumptive. The basic idea being “Oh, yes, we know that guy. He is so dishonest. He is out to loot the world. So harass him by publishing his name”. CIC seems unconcerned about the consequences of such an unwise act.
CIC needs to cosider tha fact that publication of names like this will make it almost impossible for the ill fated companies to revive, resurrect, rehabilitate and the loans would actually go down, entirely beyond redemption.
As suc, NPA is not just a bad loan account in the books of a bank / branch. It is not just the owners of the company. NPA means a huge pile of wastage of resources. NPA means loss of jobs with which are lost a lots of hopes, dreams and aspirations of countless people. NPA means a good idea, lots of money, together with lot of effort and endeavour, all gone to seed. NPA in reality is a ‘human’ problem.Hence, the banks must consider revival of industries before declaring them as dead and send the corpse for postmortem.
And yes, whoever assumes the other man as dishonest, can hardly be honest himself.
Regards.
D C Binjola
i appreciate cic direction to rbi. i also agree with the contention of rbi that information on defaulter banks shared with rbi is under rbi’s fiduciary capacity and are very confidential in nature. but rbi should not forget that larger public and economic interest are more important than that of few parties. futher rbi contended that disclosure on list of business who are defaulters of loans from public sector banks can lead to damage to the state’ economic interest. but this contention of rbi was also rejected by central information commission with saying that if RBI contention means that such other defaulters would no longer bank with such bank making defaulters name public. than it will be much more in the wellbeing of economic and larger interest of citizen. one of good things will be acheived by disclosing information on defaulter will be to refrain other such business from getting defaulters on thier loand and moreover it will positviely put all those defaulter on shame and out of this shame may be they find themselves under immense social pressure to pay their dues.