RBI RELENTS – WILFUL DEFAULTERS LIST COMES 7 YEARS LATE

In May 2014 Modi was sworn in as the Prime Minister of India and eight months after that, in February 2015, the former RBI Governor, Raghuram Rajan notified the PM about the need to probe into key defaulters. Obviously, nothing was done. In fact Rajan sent out a list of defaulters and some of those named, because of the inaction, managed to flee the country. Its petty politics to sit and find out whether the defaulters belonged to the UPA regime or the NDA – the bottomline is that the banks were looted and even till date, banks are reeling under it.

The RBI has always been very reluctant to share the names of the defaulters, saying that revealing the names would go against the economic interests of the country and its fiduciary relationship with the banks did not allow RBI to come clean. Somehow, this reasoning never made any sense especially when RBI keeps on saying that it has the interest of the citizens as its core.

Since 2012, RBI is being coxed and forced to reveal the names of the wilful defaulters and it is only now, seven years later, on 20th Nov 2019 that RBI finally relented.

But once again, it is a back handed way of giving the names – the list is the name of debtors who have been flagged as defaulters by the banks, giving details of ‘funded advances outstanding and amount ‘prudentially/technical written off’ as at 30th April, 2019. This list, which has come 7 years late, does not mention any data on NPAs or bad loans amassed by these wilful defaulters.

The list is in response to the RTI filed by TheWire and this has come after a long, long pursuit.

Take a look how much coaxing and finally forcing it took for RBI to give the list:

• First in 2011, a bunch of RTI applications were filed, seeking information from RBI.
• These RTI’s reach Central Information Commission’s (CIC).
• CIC’s commissioner then, Shailesh Gandhi directs RBI to disclose the petitioners information.
• RBI hid behind the ‘fiduciary relationship’ and did not give info.
• Gandhi wrote back saying that the information on wilful defaulters to be provided by RBI will far outweigh the ‘fiduciary relationship.’ 
• CIC issued 11 orders in all – nothing happened.
• RBI got a stay order from the Delhi High Court.
• In 2015, while hearing Jayantilal N Mistry vs RBI  case, the Supreme Court (SC) clubbed CICI’s 11 orders, upheld Gandhi’s order and directed RBI to disclose the information.
• Despite SC orders, RBI did not provide any information.
• Petitioners approached the SC seeking contempt action against the RBI
• In April 2019, SC ruled that if RBI continued to violate the top courts order, it will be held in contempt of court proceedings.
• But even after that, only 9 months later, RBI gave out information.

Why is RBI so reluctant to share information? When companies are looting the country and scooting away with tax payers money, leaving banks crippled and maimed, what is RBI protecting? Why so much secrecy in revealing names when RBI should ideally be the one to proactively give out such information – that could helped prevent so many of these wilful defaulters from absconding.

Well, we can only thank these petitioners, especially TheWire to relentlessly pursue this matter. This is really what journalism is all about, isn’t it?

This is what infuriates the most. If a common man misses one or two EMIs, that too it could be a measly sum of less than Rs.1 lakh, he faces the threat of becoming homeless. Here, we have one man looting the country of over $1 billion and he jets around scot free, enjoying the high life. What kind of a country are we living in? Isn’t this capitalism? So we should all stop kidding ourselves that India has a socialist bent. If a country makes its policies, Budgets, bends rules to accommodate the rich and famous, how can we call ourselves as an ‘inclusive’ country. Let’s face it – we are a country which just borders on socialism; overall, all our attitude reeks of capitalism.

For a complete read into this list: https://thewire.in/banking/rbi-wilful-defaulters-disclose-rti