RBI ready to share information on defaulters for loans over Rs 5 crore: Report

The finance ministry asked the RBI to provide information on all such borrowers in order to monitor the process of sanctioning loans

The Reserve Bank of India (RBI) has said it is willing to share details of borrowers who have taken large loans of over Rs 5 crore with the government if vigilance and investigative agencies require the information, or for court cases, The Indian Express reported on Tuesday.

The move comes after the central bank and the Finance Ministry, according to the Economic Times, disagreed over access to a database of borrowers with loans exceeding Rs 5 crore. 

According to the report, the finance ministry has asked the RBI to provide information on all such borrowers saying that it wanted to monitor the process of sanctioning loans, among other reasons.

The Economic Times quoted a finance ministry official as saying that access to the database would allow authorities to "keep a check on loan sanction procedures and in taking up cases if there are any vigilance issues".

"It is a pre-emptive action rather than looking into the details once the account has become a non-performing asset due to various reasons," the official explained. In the case of some large willful defaults, banks had been caught "unawares" or had taken few steps to secure collateral, he added. 

The database in question, according to the Indian Express, is maintained by the Central Repository of Information on Large Credits (CRILC), which was set up the RBI last year.

According to the report, the intention behind setting up the database is to "improve assessment of credit risk by the banks, early detection of non-performing assets (NPAs), and to improve recovery of loans".

While the RBI has refused to share the whole database with the ministry, it has agreed to share information regarding accounts specifically sought by investigative agencies.   

CRILC, according to the report, has been set up in order to "collect, store and disseminate information on large credits of banks and non-banking financial companies" and banks are required to report special mention accounts, where principal or interest is overdue for period up to 90 days, to the database. These loan accounts are then treated as non-performing assets, or NPAs. 

Citing sources, the Indian Express said that private sector banks raised objections to the RBI sharing the entire database with the government. The reason cited was that the government has a "conflict-of-interest in gaining data on commercial activities of its competitors" since it also the owner of public sector banks.