SC seeks government’s action plan on recovery of bad loans
New Delhi, Nov 18 (IANS) The Supreme Court on Friday did not favour making public the names of individuals and companies with non-performing assets (NPAs) or bad loans of Rs 500 crore or more, and said what is important is how to recover the money and check its recurrence.
Saying that “disclosure of names would not lead us anywhere”, the bench of Chief Justice T.S. Thakur, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud said, “We want to know why are NPAs accumulating? What are reforms (needed) so that NPAs do not recur? What are the deficiencies in the recovery system? Disclosure of names is not going to serve any purpose.”
The Reserve Bank of India has submitted a list of such defaulters to the apex court in a sealed cover.
Having said this, the court asked the government to submit a comprehensive note indicating the government’s action plan to recover the NPAs. The court said this should be submitted in four weeks in a sealed cover.
The court sought the comprehensive note from the government after Solicitor General Ranjit Kumar told the court that besides a high level committee that is looking into the banking sector reforms, the government is also independently looking into the matter of NPAs.
The court said the committee set up by the government to suggest banking reforms should submit its report in four weeks, and added that the recommendations of the panel would be subject to its scrutiny.
It fixed December 12 as the next date of hearing in the matter.
Telling the court that the committee was in the last lap of its work and would finalise its report by this month-end, the Solicitor General opposed the suggestion by NGO Centre for Public Interest Litigation (CPIL) counsel Kamini Jaiswal for an independent economist on the Committee.
He told the court that the committee that was set up in May this year has held six meetings and is in the process of finalising the report.
The Solicitor General told the court that the committee is examining all the issues that were earlier raised by CPIL counsel Prashant Bhushan in the matter.
During the hearing on October 24, the Supreme Court had said that it would hold hearing on whether the names of individuals and companies with non-performing assets (NPAs) of Rs 500 crore or more could be made public.
The court is hearing a PIL by the NGO CPIL which pointed to loans given by the Housing and Urban Development Corporation Ltd in 2003 to some of the companies with questionable track records. It was in the course of hearing of this PIL that the court focused on the recovery of large NPAs.