The Wire:
New Delhi: Friday, June 21, 2019.
While
responding to an RTI query, the RBI refused to reveal who these top 100
borrowers are.
Nearly
50% or Rs 4.5 lakh crore of the total value of India’s non-performing assets
(NPAs) are due to loans taken out by the top 100 borrowers, an RTI query filed
by The Wire has revealed.
The
Reserve Bank of India (RBI) said that as of December 31, 2018, loans taken by
the top 100 borrowers created NPAs worth Rs 4,46,158 crore. This means that on
average, each of the top 100 borrowers is responsible for NPAs worth Rs 4,461
crore. The RBI refused to provide details on who these top 100 borrowers are.
According
to an answer given by the then finance minister in the Rajya Sabha on February
5, 2019, the total value of NPAs in scheduled commercial banks was Rs 10,09,286
crore as of December 31, 2018. Of that, the value of NPAs in public sector
banks was Rs 8,64,433 crore.
This
means that 44% of the total NPA value is owed by just the top 100 borrowers.
And if only public sector banks are considered, then 52% of the total NPA value
is owed by these top 100 borrowers. As of March 2019, 9.3% of the total given
loan amount had been declared as NPA.
On
April 26, 2019, the Supreme Court heard a contempt plea regarding the RBI’s
refusal to divulge details on defaulters. The court criticised the RBI and
directed the bank to reform its transparency guidelines and provide these
details to the public.
The
highest court said that this was RBI’s last chance, and that if the bank still
refused to provide details, action would be taken against the central bank for
contempt of court.
Yet,
in response to the RTI filed by The Wire, the RBI refused to provide details on
the accounts of the top 100 borrowers. It did not provide the names of the
account holders, the amounts owed by them or the interest rates at which they
have borrowed money. The RBI said that such information is not available.
The
central bank said that it collects information regarding debt under Section
27(2) of the Banking Regulation (BR) Act 1949 and under Section 28 of the RBI
Act, 1934. The RBI’s response said: “As per Section 28 of the BR Act, RBI can
only disclose information collected under Section 27 (2) of the Act in such
consolidated manner as it deems fit.”
The
bank said that in terms of Section 45(E) of the RBI Act, RBI is prohibited from
disclosing credit information except under certain conditions as stated in the
Act.
In
its recent judgement, the Supreme Court had directed the RBI to furnish details
of its annual inspection reports and regarding its show-cause notices. But the
RBI has violated the Supreme Court’s directive and refused to provide this
information.
The
RBI said: “Compilation of the required information as sought by the applicant
would disproportionately divert the resources of the public authority. Hence,
we are unable to provide the information in terms of Section 7 (9) of the RTI
Act, 2005.”
This
is, however, misleading. Section 7(9) of the RTI Act does not permit an
institution to refuse to provide information. It only says that if the
information is not available in the format in which it has been requested by
the applicant, the public information officer should provide the required
information in whatever format it is available in.
When
asked for information regarding bank defaulters, the RBI said, “The matter is
under examination.” But according to the Supreme Court’s orders, the bank
should provide that information.
Central
information commissioner M. Sridhar Acharyulu, who retired on November 20 last
year, wrote to chief information commissioner R.K. Mathur requesting that the
Central Information Commission take action against the RBI for its deliberate
refusal to provide information regarding “wilful (loan) defaulters”.
In
a 2015 decision, the Supreme Court had declared the RBI’s various appeals
illegitimate and said the CIC’s directives were correct.
Acharyulu
has said that the RBI’s violation of the Supreme Court’s orders regarding
transparency is dangerous because it will lead to a culture of secretive
financial governance. This will enable financial scams to take place and allow
defaulters to escape the country without repercussions, as has happened in
recent times.
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