1. Tax payers need to know how PSBs write-off bad loans: HC

Tax payers need to know how PSBs write-off bad loans: HC

According to information procured by RTI activist, Sanjay Shirodkar, around 14 PSUs such as SAIL, Coal India, and ONGC had showed more than Rs 7,500 crore as bad debts between 2006 to March 2012.

By: | Published: June 24, 2015 8:19 AM
Tax payers, bad loans

According to information procured by another RTI activist, Sanjay Shirodkar, around 14 PSUs such as SAIL, Coal India, ONGC, Bank of Baroda, NTPC and Airports Authority of India had showed more than Rs 7,500 crore as bad debts between 2006 to March 2012. (PTI)

Why should public sector banks (PSBs) not disclose details of cases where they have written off thousands of crore of rupees as bad debts? After all, these banks do not only function on deposits from people but their equity capital is also structured on the tax payers’ money.

Observing this, the Delhi High Court has prima facie held as bad the PSBs resistance in divulging information about the entities which availed the benefits of their loans being written off as bad debts or unrecoverable amount. Justice Rajiv Shakdher, during a recent hearing, observed that this disclosure involved an element of public interest and tax payers have a right to know the manner in which PSBs sanctioned them.

The judge noted there were several cases wherein the banks wrote off debts to the tune of Rs 100 crore or more while the government kept infusing tax payers’ money in the form of equity capital.

Justice Shakdher questioned the rationale behind stonewalling such queries under the Right To Information Act and said: “Prima facie, in my view, this information may have to be disclosed.”

The court was hearing an appeal by the State Bank of India, which challenged a Central Information Commission order to supply to an RTI applicant information about total NPAs written off during 2004 and 2013. The bank told the court it has a fiduciary relationship with the account holders and the information would hence be exempted from disclosure under Section 8(1)(e) of the RTI Act. But the court said: “The petitioner is undoubtedly a nationalised bank, which has on its own showing written off as NPAs, its loan accounts having outstanding of Rs 100 crore or more. The sheer extent of the write off would in my view, perhaps, inject an element of public interest in the matter, which is the exception provided for in Section 8(1)(e)”.

It, however, decided to further examine the matter considering the dissenting views taken by the Central Information Commission and the courts in the past and issued a notice to Kochi-based RTI applicant Raju Vazhakkala.

As per another RTI filed by Mumbai-resident Richie Shoaib Sequeira, the banks have written off over Rs 15,000 crore during 2003-08. The PSBs refused to reveal names, claiming it was an invasion into the borrowers’ privacy and was not in public interest.

Sequeira has filed a PIL in the Supreme Court, pointing out there is no guidelines by the finance ministry and the RBI for writing off such loans. Further, the Debts Recovery Tribunals could recover only 32 per cent of the outstanding amount in 2001-07. The PIL is pending.

According to information procured by another RTI activist, Sanjay Shirodkar, around 14 PSUs such as SAIL, Coal India, ONGC, Bank of Baroda, NTPC and Airports Authority of India had showed more than Rs 7,500 crore as bad debts between 2006 to March 2012.

  1. No Comments.

Go to Top