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SC asks government for progress report on banks' NPA

The Supreme Court on Wednesday gave six weeks time to the Centre to file a progress report on the steps taken by it on the basis of guidelines issued by the Reserve Bank of India regarding the non-performing assets of nationalised banks and financial institutions.

Without issuing notice to the government, a three-judge bench comprising Chief Justice A S Anand, Justice R C Lahoti and Justice Brijesh Kumar gave this direction on a public interest litigation filed by Common Cause, a non-governmental organisation.

The petitioner through counsel Prashant Bhushan alleged that most of the NPAs in the banks have resulted due to corruption among officials who were instrumental in converting loans into bad debts.

The petitioner suggested that a high-level investigation be ordered into this as suggested by the Comptroller and Auditor General.

However, Solicitor General Harish Salve said that a number of steps have been taken by the government on the basis of the guidelines issued by the RBI and added that he expected good results from this.

The chief justice suggested that for settlement of small loan defaults, the banks should approach the Lok Adalats, which are quite fast in disposing cases.

He said in 1999 the Lok Adalats settled only 900,000 cases. After his request as chief patron of National Legal Aid Services Authority, to take more cases, the Lok Adalats have disposed a whopping 1.8 million cases in 2000.

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