Try credit info firms for data on defaulters: RBI to RTI query

The Reserve Bank of India (RBI) seems to be confused about how to respond to queries related to the disclosure of wilful defaulters.

While the regulator had earlier dismissed a query filed by BusinessLine under the Right to Information Act, 2005 saying it did not have the resources to compile the list of defaulters, a second reply from another desk in the RBI has passed the buck on to credit information companies such as Credit Information Bureau (India) Ltd (CIBIL).

“Banks and financial institutions have been advised to submit the data regarding wilful defaulters and defaulters to Credit Information Companies and not to the RBI from December 2014 onwards. Therefore, we do not have the information,” the RBI said, in response to an RTI filed by BusinessLine .

In an earlier reply, dated April 7, the regulator had said: “Compilation of the same (list of wilful defaulters) would disproportionately divert resources.”

This comes even as pressure builds on the central bank to put in place a system that would name and shame wilful defaulters. The Supreme Court had recently said that it was in favour of making public the list of defaulters. The apex court has observed that “the RBI is supposed to uphold public interest and not the interest of individual banks”, nor is the central bank in “any fiduciary relationship with any bank”.

However, the central bank has so far refused to make the names public on the ground that it would affect companies’ health if they are in genuine difficulty and “may accentuate the failure of the business rather than nursing it back to health”.

Various bank associations and unions are demanding a more pro-active response by the RBI. “If publication of the names of defaulters would defame them or result in loss of business, why is no such consideration being shown for the common man who avails a bank loan? …when it comes to industrialists, all soft options are being advocated,” said a statement from the All India Bank Employees’ Association.

More than 5,600 defaulters According to one estimate, there are more than 5,600 wilful defaulters, who together owe more than ₹60,000 crore to banks.

Indian National Bank Employees’ Federation General Secretary Subhash Sawant said the RBI’s argument that it cannot allot resources to draw up a list of defaulters does not hold much water because banks have been computerising their operations for the past 15 years. All the information is available at the click of a button.

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