If not defaulters' names, disclose amounts, SC tells RBI

The Supreme Court today suggested that if confidentiality prevents the Reserve Bank of India from revealing the names, it should at least publicly expose the "huge and substantial amounts" taken as bank loans by the rich who are now defaulters.

Supreme Court"People are taking thousands of crores of rupees to run their empires and then later declaring insolvency only to take more loans from other sources ... when poor farmers are driven to suicide as they are 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 it from passing a judicial order to reveal the details of the "very substantial debt amounts" of those who had taken Rs500 crore or more in loans from banks.

The bench, also comprising Justice R Banumathi, issued notice to the Indian Banks Association and the union ministry of finance in this regard.

"We want you to formulate issues by 26 April. We will have a focussed and articulate debate on these issues. The primary question is whether there is any confidentiality on information relating to outstanding debts over Rs500 crore," Chief Justice Thakur said.

The court was hearing a public interest litigation filed by the non-profit Centre for Public Interest Litigation, seeking full disclosure of names and details of those who had defaulted after taking loans of over Rs500 crore.

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.

The 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 are 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 violate 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 over secrecy.