SC says addressing root cause of bad loans is important, not disclosing big defaulters
Apex Court asked the central government to file an affidavit within four weeks detailing steps taken to overhaul debt recovery system
The Supreme Court on Friday observed that disclosure of names of debtors will not lead "anywhere" as the important issue is to address "root cause" of accumulation of non-performing assets (NPAs).
The Apex Court also asked the central government to file an affidavit within four weeks detailing steps taken to overhaul debt recovery system.
The centre has also been directed to submit details on laws dealing with quasi- judicial bodies like the Debt Recovery Tribunal (DRT) and the Debt Recovery Appellate Tribunal (DRAT).
"The disclosure of names with over Rs 500 cr bad loans will not lead anywhere. Root of the malice is accumulation of NPAs. The real cause is to address the root cause of NPAs and how to solve it," the SC said.
Reports said only 57 borrowers have defaulted on bank loans amounting to a whopping Rs 85,000 crore.
The SC has been enquiring the RBI and the Centre about the possibility of revealing names of those who have defaulted in repaying bad loans worth Rs 500 crore and more to banks.
After receiving an RBI report on bad loans, the SC asked the central bank as to why their names should not be made public.
The court earlier questioned the situation, asking "who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to the public."