At a time when policy-makers, investors and banks are exercised about rising non-performing assets and the growing incidence of borrowers turning wilful defaulters, the Reserve Bank of India claims it does not have a list of such entities.
In response to an RTI query filed by BusinessLine , the RBI said it did not have a list of wilful defaulters and that “compilation of the same (list of wilful defaulters) would disproportionately divert the resources of the Public Authority.”
This comes even as the Supreme Court has favoured making public the list of defaulters. The RBI opposed it, saying it would violate the confidentiality clause.
While responding to the RTI query, the RBI appears to have taken cover under Section 7(9) of the Right to Information Act 2005, which states: “An information shall ordinarily be provided in the form in which it is sought unless it would disproportionately divert the resources of the public authority or would be detrimental to the safety or preservation of the record in question.” The period of the information was sought from December 31, 2015, to March 19, 2016.
‘Burying its head’ Asked about the central bank’s stand, a former Central Chief Information Commissioner, Shailesh Gandhi, said that the RBI is trying to bury its head in the sand. “It is like saying when I see no evil, there would be no evil, and if something does go wrong, I can’t be held responsible,” he said. Gandhi pointed to the December 2015 Supreme Court order which states the RBI must share the information on defaulters. Its failure to comply amounts to open defiance of the top court’s order, he added.
‘Can affect sentiments’ On the other hand, a former RBI Deputy Governor, Usha Thorat, said if banking secrecy laws are violated, confidentiality would be undermined, which can impact business investments. Many large companies, which owe substantial amounts to banks, have been affected. If these companies are publicly shamed, the whole credit system will come to a halt, she said.
In FY15, the gross non-performing assets of scheduled commercial banks rose to 6 per cent of the total advances from 5.7 per cent in the previous year.