Skip to main content

Transparency activist: Does Modi govt include bank defaulters for pledging "sab ka saath, sab ka vikaas"?

By Our Representative
The Reserve Bank of India's (RBI's) recent "submission" through an affidavit to the Supreme Court of India, in a sealed cover, a list of defaulters on loans, worth Rs 500 crore or more, taken from different banks, has created a flutter among pro-transparency activists.
The Apex Court had sought this information from the RBI after it took suo motu cognizance of a recent news report about how a majority of the public sector banks had "written off" bad debts to the tune of Rs 1.14 lakh crore between the financial years 2013 and 2015. The data was obtained by making a right to information (RTI) plea.
In order to justify its act, the RBI has argued that "public disclosure would dent the 'fiduciary relationship' that it has with the commercial banks and in turn the 'fiduciary relationship' that those banks have with their borrowers."
In an email alert, RTI activist Venkatesh Nayak of the Commonwealth Human Rights Initiative (CHRI) says, the RBI's own Master Circular relating to customer service issued in July 2015, suggests that it has contracted its own stance before the Supreme Court.
Paragraph #25 of Master Circular, which talks of "Customer Confidentiality Obligations", says, "The bankers' obligation to maintain secrecy arises out of the contractual relationship between the banker and customer, and as such no information should be divulged to third parties except under circumstances which are well defined."
At the same time, it has made following exceptions: (i) Where disclosure is under compulsion of law, (ii) Where there is duty to the public to disclose, (iii) Where interest of bank requires disclosure, and (iv) Where the disclosure is made with the express or implied consent of the customer.
According to Nayak, "This Master Circular makes it clear that the term 'customer' includes both depositors and borrowers. The characterisation of a bank's relationship with its borrowers -- particularly those who defaulted on repayment of loans as 'contractual' in nature clearly contradicts what it said before the Apex Court."
Nayak insists, "RBI needs to explain to its depositors whose hard earned money it lends out, why it is pushing for double standards -- one for internal operations and one when faced with litigation launched in public interest."
He continues, "Until the Apex Court directs the public disclosure of the names of defaulters contained in sealed cover handed over to it by RBI, it will not be known how many of them are 'wilful defaulters'."
To prove his point, Nayak quotes from another RBI Master Circular, which describes 'wilful default' as "deemed to have occurred" if "the unit has defaulted in meeting its payment/repayment obligations to the lender even when it has the capacity to honour the obligations."
The Master Circular adds, "The identification of the wilful default should be made keeping in view the track record of the borrowers and should not be decided on the basis of isolated transactions/incidents. The default to be categorised as wilful must be intentional, deliberate and calculated."
Comments Nayak: "There is very little information in public domain about whether these banks checked whether the defaulters were 'wilful defaulters' or not before writing off bad loans or pushing for debt restructuring."
He adds, "Ten public sector banks rejected my request for this information in 2014. They cited 'commercial confidence' covered by Section 8(1)(d) of the RTI Act as the reason for refusing access to names of defaulters and the manner in which bad loans were restructured."
Nayak says, "Fiduciary relationship is a relationship based on mutual trust and everything that is done in it must be done lawfully. The law does not permit any kind of protection based on trust for illegal or wrongful actions."
He adds, "The Government of India must also clarify whether its promise of 'sab ka saath, sab ka vikas' (with all development for all) will include loan defaulters also, particularly wilful defaulters who seem to have a 'dented and painted relationship' with some banks which is now being characterised as 'fiduciary' in nature."

Comments

TRENDING

It's now official: Developed Gujarat's regular, casual workers earn less than 19 top states

By Rajiv Shah
Though not as low as state chief minister Vijay Rupani claims it to be (0.9%), Gujarat’s unemployment rate, at least as reflected in a recent report released by the Government of India, is 4.8%, lower than the national average, 6%. Yet, ironically, the same report, released soon after the Lok Sabha polls came to an end in May 2019, brings to light an even grimmer reality: Lower wages in "model" and "developed" Gujarat compared to virtually the whole of India, including the so-called Bimaru states.

Telangana govt proposes to give unfettered powers to forest officials, 'help' corporates

By Dr Palla Trinadha Rao*
The Telangana Government is contemplating to replace the Telangana Forest Act 1967 with a new law - the Telangana Forest Act (TFA) 2019, trampling the rights of adivasis ensured under the Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (FRA Act 2006) and Panchayats Extension to Schedule Area (PESA) Act 1996 both of which are central acts.

RSS, Hindu Mahasabha were 'subservient' to British masters: Nagpur varsity VC told

Counterview Desk
Well-known political scientist Shamsul Islam, associate professor (retired), University of Delhi, in an open letter to the vice-chancellor of the Rashtrasant Tukadoji Maharaj Nagpur University, Dr Siddharthavinayaka P Kane, has taken strong exception to the varsity decision to include RSS’ “role” in nation building in the syllabus of the BA (history) course, citing instances to say that the RSS ever since its birth in 1925 with its Hindutva allies like Hindu Mahasabha led by VD Savarkar worked overtime to “betray the glorious anti-colonial freedom struggle”.

Amaravati: World Bank refusing to share public grievances on Land Pooling Scheme

By Our Representative
A new report, prepared by the advocacy group Centre for Financial Accountability (CFA), New Delhi, has taken strong exception to the World Bank refusing to share its independent assessment of the Land Pooling Scheme (LPS), floated by the Andhra Pradesh government in order to build the new capital.

British companies export 'deadly' asbestos to India, other countries from offshore offices

By Rajiv Shah
“The Sunday Times”, which forms part of the powerful British daily, “The Times”, has raised the alarm that though the “deadly” asbestos is banned in Britain, companies registered in United Kingdom, and operating from other countries, “are involved in shipping it to developing nations”, especially India. India, Brazil, Russia and China account for almost 80% of the asbestos consumed globally every year, it adds.

Beijing-based infrastructure bank 'funding' India's environmentally risky projects

By Our Representative
A new civil society note has questioned the operations of the Beijing-based Asian Infrastructure Investment Bank (AIIB), a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region, seeking to fund projects in India through the Government of India’s National Infrastructure Investment Fund (NIIF), calling it “a risky venture”.

Include all workers exposed to silica dust in anti-TB programme: Govt of India told

Counterview Desk
In a letter, sponsored by well-known civil rights organization, Occupational & Environmental Health Network of India and signed by more than 60 professionals and activists*, Dr Harsh Vardhan, Union Minister of Health and Family Welfare, Government of India, has been told that Indian policy makers shouldn't just acknowledge higher TB risk to mine and stone crusher workers, but also “other silica-exposed workers”.

Universal healthcare? India lacks provisions to 'fight' non-communicable diseases

By Moin Qazi*
Universal health coverage (UHC) -- ensuring that all people receive proper and adequate health care without suffering financial hardship -- is an integral part of achieving the Sustainable Development Goals. It enables countries to make the most of their strongest asset: human capital.

Polygamy in India "down" in 45 yrs: Muslims' from 5.7 to 2.55%, Hindus' 5.8 to 1.77%, "common" in SCs, STs

By Rajiv Shah
Amidst All India Muslim Personal Law Board (AIMPLB) justifying polygamy, saying it “meets social and moral needs and the provision for it stems from concern and sympathy for women”, facts suggest the the practice is down from 5.7 per cent of Muslim families in 1961 to 2.55 per cent in 2006.

TISS Hyderabad: Burden of funds cut falls on students from 'marginalized' sections

Counterview Desk
Top activists associated with the National Alliance of People’s Movements (NAPM), a civil society network, including Medha Patkar, Aruna Roy, Nikhil Dey, Shankar Singh, Dr Binayak Sen, and Prafulla Samantara, has protested against the decision of the Tata Institute of Social Sciences (TISS) administration for “sine die” closure of TISS, Hyderabad Campus, even as “denying” hostel access to Dalit and Adivasi students.