[Reader-list] Banks shy away from revealing big defaulters’ names

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Banks shy away from revealing big defaulters’ names

C Unnikrishnan I TNN ( TOI 21.9.2009 pg 2 )

Mumbai: Although a Union finance minister had once described the
rising non-performing assets (NPA) of nationalised banks as a loot,
public sector banks are unwilling to divulge the names of those who
have defaulted on huge loans. None of the 25 public sector banks who
were asked to name big defaulters under the Right to Information Act
(RTI), did so.

Sixteen of these banks merely gave figures of the outstandings, while
nine refused to even reply. According to information provided under
RTI, the banks have written off over Rs 15,000 crore in the period
2003-2008.

The banks reasoned that furnishing the names is not in public interest
and is an invasion into the privacy of borrowers.

The RTI application was filed by Borivili resident Richie Shoaib
Sequeira on the directions of the Bombay high court. On Thursday,
chief justice Swatanter Kumar and Ajay Khanwilkar, while hearing his
PIL, directed that notices be issued to Union of India, RBI and other
banks. The court also directed Sequeira to make the state crime
investigation department a party to the PIL. The matter will come up
for hearing on October 15.

At the last hearing, the HC asked Sequeira to invoke RTI or any other
law to gather details from the banks. Sequeira had filed a PIL, saying
there has been no strict vigil by the finance ministry and RBI while
writing off loans by the banks and the Debts Recovery Tribunal (DRT)
had failed to recover the debts. The RBI, finance ministry, law
ministry and DRT have said that in their replies they have no records
of the write-offs and one-time settlements between the borrowers and
banks.

The PIL also said that no rules have been framed by the finance
ministry while writing off loans by the banks, which smacks of
corruption. Some of the banks in their replies have said that the
write-off is done in accordance with the guidelines framed by the
board of directors. During a debate in Lok Sabha in 2002, then finance
minister Jaswant Singh had described the NPA menace as a loot.

The banks, which refused to disclose details about the defaulters
include, SBI, its associates, Union Bank, Bank of Baroda, Central Bank
of India, Dena Bank, Andhra Bank, Oriental Bank of Commerce, Syndicate
Bank and Indian Overseas Bank. Banks like Corporation Bank, UCO Bank,
BoI and Allahabad Bank refused to reply to the RTI questions.

The banks mostly approach the DRT, attach assets under the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act or go in for a onetime settlement to recover
whatever dues they can. The DRT, set up for expeditious adjudication
and recovery of debts owed to banks and financial institutions,
recovered just 32% of the total outstanding amount in the period
2001-07.

In the case of State Bank of Travancore, in 2003-2008, of the Rs
10,162 crore claimed by the bank, it has recovered only 15%. Another
50% of the claims is yet to be decided. In the onetime settlement, the
bank has forgone another Rs 800 crore.

Dena Bank has managed to recover only Rs 725 crore of the Rs 151,85
crore for the period 2003-2008. The bank has foregone another Rs 950
crore as part of one-time settlement in the period 2006-2008. In the
case of Oriental Bank of Commerce, the bank has foregone Rs 1353.5
crore in the last four years. Union Bank of India has recovered only
Rs 3,261.5 crore of the Rs 7,623 crore in 2006-08.
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Read how Punjab National Bank gave Rs 11.5 crores against flat ONLY 400 sqft.

http://www.RoguePolice.com/pnb.htm