"Disclosing details of accounts where defaults have been found, irrespective of the reasons for no-repayment, may have adverse impact
and in a way may accentuate the failure of business
rather than nursing it back to health,” the central bank
told the apex court in its affidavit submitted along with the list
The banking regulator
said that defaults have happened due to many reasons, and in some cases, even when the borrower had the best of intent, the newspaper reported.
Delayed permissions from government and regulators, delays in land acquisition and loans, downturn in business
cycle, among others, are reasons for default, the RBI
"Disclosure of names of defaulters
may have an impact
on the livelihood of scores of employees
employed in such entities,” the central bank
said. It also added that making the names public would defeat the purpose of fiduciary (a relationship involving trust) responsibility for banks.
“Disclosing personal information which is fiduciary in nature with regard to banks by a statutory body would defeat the very purpose of having fiduciary responsibility on the part of banks. For these reasons, it is extremely necessary to keep the confidentiality of the information provided along with this affidavit”, the RBI
The Supreme Court, had on February 16, demanded a list
of big defaulters
while hearing a Public Interest Litigation (PIL) filed by an NGO, Center for Public Interest Litigation. It had alleged a significant rise in non-performing assets (NPAs) of public sector banks due to regular waivers and restructuring of loans.
The central bank, in its response to the court’s query, said that the write-offs of NPAs by banks was a regular exercise to clean up their balance sheets, a report in Hindustan Times states
. “Substantial portion of write-offs is however, represented by technical write off which is primarily intended at cleansing the balance sheet and achieving taxation efficiency,” it added.