RBI chief: Will make wilful defaulters’ list public
Reserve Bank of India is working on putting in place a new mechanism to make public the list of wilful defaulters along with a system for out-of-court settlement for disputes related to sticky loans, governor Raghuram Rajan said on Saturday .
He, however, ruled out making all names public, arguing that clubbing serious defaulters with those who forget to pay their credit card bills could result in people throwing away their cards.
“As a regulator we have no intent or desire to protect malfeasance… We are very happy to make that list public. In fact, my people are working on making sure that we can put that list up in an accessible way and also (of) defaulters against whom suit has been filed because that is already public information,“ Rajan said while delivering a lecture.
He insisted that RBI was in favour of protecting privacy in cases where there is no wrongdoing. Lenders such as Punjab National Bank periodically disclose names of wilful defaulters but most banks have refrained from doing so.
Rajan’s comments are a reiteration of the regulator’s stance before the Supreme Court, where it has submitted the names of large defaulters in a sealed cover and has asked the court not to make them public amid demands to name and shame evaders. Indian banks are grappling with record non-perfor ming assets as several projects have failed to take off and several companies are saddled with excessive debt but low revenue flow from their businesses as demand too has remained weak.
RBI has been pushing banks to classify several accounts as non-performing, which has impacted the profitability of lenders and pushed several of them -from Bank of Baroda and Bank of India to IDBI and Indian Overseas Bank into losses.
“We have to be weary of killing entrepreneurship in this country by putting all unsuccessful risk taking in the same basket. We need risk taking, we need people to take risk,“ Rajan said.
Rajan added the RBI is creating a structure for an out of court settlement of the disputes relating to bad debt.
aajtak news 08/05/2016 :