SC Notice to FinMin, Banks’ Association on Huge Outstanding Loans
The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai. (Photo: Reuters)
The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai. (Photo: Reuters)

SC Notice to FinMin, Banks’ Association on Huge Outstanding Loans

The Supreme Court on Tuesday issued notices to the Finance Minister and the Indian Banks’ Association (IBA), asking them to explain the huge outstanding loans. The apex court said the list of loan defaulters of over Rs 500 crore handed over by the Reserve Bank of India (RBI) was “quite a substantial amount” and there was enough ground to make out a case.

The Supreme Court will examine if the total amount of defaulted loans running into crores can be disclosed, something the RBI has maintained is inadvisable.

The central bank raised the confidentiality clause when the Chief Justice of India questioned why the outstanding loan figures running into “lakhs of crores” cannot be disclosed, even if the names of bank loan defaulters are not made public. The SC also sought replies from the RBI about the steps being taken to recover bad loans.

In a reference to erstwhile liquor baron Vijay Mallya, who currently battling a consortium of banks over the repayment of a debt of over Rs 9,000 crore, the SC said,

People take loans of thousands of crores. They declare themselves insolvent and their loan restructuring goes on for years. Poor farmers take loans in thousands but have to sell their lands.

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