Free Press Journal

SC ruling on banks’ big loan defaulters after four weeks


New Delhi : The Supreme Court on Monday decided to hear after four weeks whether or not a list of big loan defaulters submitted to it by the Reserve Bank of India (RBI) can be disclosed.

The list was submitted by the RBI in March in a sealed envelope, pleading that the public disclosure of the names could have an adverse impact on businesses.

“There are a series of statues that can be looked into to decide whether the disclosure can be made,” counsel for the RBI submitted, persuading a Bench of Chief Justice Jagdish Singh Khehar and Justice D Y Chandrachud to hear further after four weeks.

On February 15, the Supreme Court had made the RBI a party “in public interest” to a 2003 case filed by the Centre for Public Interest Litigation, an activist organisation headed by senior advocate Prashant Bhushan related to bad loans advanced to a few companies by state-owned Housing and Urban Development Corp. Ltd. The case was

The court had directed RBI to provide a list of companies that have defaulted on bank loans in excess of Rs 500 crore and expressed serious concern over rising bad loans.

RBI cited reasons such as delays in securing clearances from the government and regulatory agencies, completing acquisition of land, an unanticipated business cycle downturn and poor project execution, besides poor credit appraisal and monitoring by banks, for piling bad loans.

The court had earlier asked how state-owned banks and financial institutions were advancing large-scale loans without proper guidelines and whether there were adequate systems in place to recover them.