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The Supreme Court on Tuesday directed the Reserve Bank of India to provide a list of companies which are defaulters of bank loans of over Rs 500 crore (Rs 5 billion) while expressing serious concern over the rise in bad loans.
The apex court also asked the Reserve Bank of India 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 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 RBI party to a PIL filed in 2005 by a non-government organisation Centre for Public Interest Litigation in which it has raised the issue of loans advanced to some companies by state-owned Housing and Urban Development Corporation.
Advocate Prashant Bhushan, appearing for CPIL, submitted that about Rs 40,000 crore (Rs 400 billion) 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 loan from the defaulters.
"You have a list of major defaulters who run empires and yet default," the bench asked 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 and the inability of the banks to recover them.
Illustration by Uttam Ghosh/Rediff.com