While responding to an RTI query, the RBI refused to reveal who these top 100 borrowers are.
Nearly 50% – or Rs 4.5 lakh crore – of the total value of India’s non-performing assets (NPAs) are due to loans taken out by the top 100 borrowers, an RTI query filed by The Wire has revealed.
The Reserve Bank of India (RBI) said that as of December 31, 2018, loans taken by the top 100 borrowers created NPAs worth Rs 4,46,158 crore. This means that on average, each of the top 100 borrowers is responsible for NPAs worth Rs 4,461 crore. The RBI refused to provide details on who these top 100 borrowers are.
According to an answer given by the then finance minister in the Rajya Sabha on February 5, 2019, the total value of NPAs in scheduled commercial banks was Rs 10,09,286 crore as of December 31, 2018. Of that, the value of NPAs in public sector banks was Rs 8,64,433 crore.
This means that 44% of the total NPA value is owed by just the top 100 borrowers. And if only public sector banks are considered, then 52% of the total NPA value is owed by these top 100 borrowers. As of March 2019, 9.3% of the total given loan amount had been declared as NPA.
On April 26, 2019, the Supreme Court heard a contempt plea regarding the RBI’s refusal to divulge details on defaulters. The court criticised the RBI and directed the bank to reform its transparency guidelines and provide these details to the public.
The highest court said that this was RBI’s last chance, and that if the bank still refused to provide details, action would be taken against the central bank for contempt of court.
Yet, in response to the RTI filed by The Wire, the RBI refused to provide details on the accounts of the top 100 borrowers. It did not provide the names of the account holders, the amounts owed by them or the interest rates at which they have borrowed money. The RBI said that such information is not available.
The central bank said that it collects information regarding debt under Section 27(2) of the Banking Regulation (BR) Act 1949 and under Section 28 of the RBI Act, 1934. The RBI’s response said: “According to Section 28 of the BR Act, the RBI may publish only information collected under Section 27(2) of the act, and only as it sees fit.”
The bank said that it has been directed to not provide any information, other than in some special circumstances as delineated under Section 45(E) of the RBI Act.
In its recent judgement, the Supreme Court had directed the RBI to furnish details of its annual inspection reports and regarding its show-cause notices. But the RBI has violated the Supreme Court’s directive and refused to provide this information.
The RBI said: “It would require too much of the bank’s resources to provide the information that has been asked for. For this reason, the bank has no obligation, under Section 7(9) of the RTI Act, to provide this information.”
This is, however, misleading. Section 7(9) of the RTI Act does not permit an institution to refuse to provide information. It only says that if an institution cannot provide information that is sought in the form that it is sought (due to drain on resources), it must provide that information in whatever form it exists.
When asked for information regarding bank defaulters, the RBI said, “We are in the process of conducting an investigation.” But according to the Supreme Court’s orders, the bank should provide that information.
Central information commissioner M. Sridhar Acharyulu, who retired on November 20 last year, wrote to chief information commissioner R.K. Mathur requesting that the Central Information Commission take action against the RBI for its deliberate refusal to provide information regarding “wilful (loan) defaulters”.
In a 2015 decision, the Supreme Court had declared the RBI’s various appeals illegitimate and said the CIC’s directives were correct.
Acharyulu has said that the RBI’s violation of the Supreme Court’s orders regarding transparency is dangerous because it will lead to a culture of secretive financial governance. This will enable financial scams to take place and allow defaulters to escape the country without repercussions, as has happened in recent times.