SC asks RBI for list of banks’ NPAs over Rs500 cr

The non-performing assets of public sector banks that have been worrying the financial authorities have now exercised the Supreme Court as well, with the apex court today directing the Reserve Bank of India to provide a list of companies, which are defaulters of bank loans of over Rs500 crore, while expressing serious concern over the rise in bad loans.

The court also asked the RBI to provide within six weeks the list of companies whose loans have been restructured under corporate debt restructuring schemes.

A bench headed by Chief Justice of India T S Thakur asked for the list of loan defaulters to be placed before it in a sealed cover.

The bench, also comprising Justices U U Lalit and R Banumathi, wanted to know how the state-owned banks and financial institutions were advancing large-scale loans without proper guidelines and whether there was adequate mechanism to recover them.

The court made the RBI party to a public interest litigation filed in 2005 by the non-profit Centre for Public Interest Litigation (CPIL) in which it has raised the issue of loans advanced to some companies by state-owned Housing and Urban Development Corporation (HUDCO).

Advocate Prashant Bhushan, appearing for CPIL, submitted that about Rs40,000 crore of corporate debt was written off in 2015.

His submission evoked response from the bench which said that bad debts were plaguing the public sector banks.

The bench expressed surprise that no concrete steps were taken for the recovery of loans from the defaulters.

"You have a list of major defaulters who run empires and yet default," the bench observed during the hearing.

While passing the order, the court took note of a report in a national daily about bad loans or non-performing assets (NPA) and the inability of the banks to recover them.

The PIL, filed in 2005 through Bhushan, had alleged that bad loans were given by HUDCO to "ineligible borrowers".

The apex court had ordered an inquiry by the Central Vigilance Commission (CVC) which in its report concluded that the loans were given to the borrowers who had already been declared wilful defaulters or having very bad track record, Bhushan said.

Though the CVC had recommended departmental proceedings and a probe by the Central Bureau of Investigation, the officers concerned were exonerated by the government of the day, he said.

He also referred to a recent news report about writing off of a total of Rs1.14 lakh crore as bad debt by public sector banks between 2013 and 2015.