RBI opposes disclosure of defaulter’s information

New Delhi: The Reserve Bank of India (RBI) on Tuesday resisted the idea of disclosing information on defaulters owing Rs.500 crore or more to public sector banks pursuant to an earlier order.

“A blanket disclosure of commercial information is not encouraged as it will affect our fiduciary relation with third parties and destroy public confidence.” J.L. Gupta, counsel for RBI told the court.

The bench presided over by chief justice T.S. Thakur then asked if the total amount outstanding by the defaulters could be disclosed.

This was also opposed by RBI, saying, “Disclosure of the aggregate figure will have an impact on the economy as a whole.”

The court also questioned RBI what steps it had taken in its capacity as a watchdog for recovery of the outstanding amount from defaulters.

Failing to reach a consensus, the court ordered the parties to jointly formulate issues arising out of disclosure of such information which would form the basis of arguments later.

Considering the scope of the proceedings, court also directed to implead the Indian Banks Association (IBA) and Union finance ministry to the case.

The court was hearing a case filed by the Center for Public Interest Litigation, an organisation headed by lawyer Prashant Bhushan, related to bad loans advanced by state-owned Housing and Urban Development Corp. Ltd.

Expressing concern over rising bad loans being sanctioned by public sector banks, the court had asked RBI to submit a list of loan defaulters owing more than Rs.500 crore.

The list was duly submitted on 30 March in a sealed cover to the court seeking confidentiality in disclosure.