Disclosure of defaulters’ names must for containing NPAs:Parliamentary panel to Govt

NEW DELHI :  The Government has been asked by a Parliamentary Committee to amend law to allow disclosure of bank defaulters’ name so that  the ”frankensteinian” proportion of NPAs could be contained.
The advice from the Parliamentary Standing Committee came after the Finance Ministry informed it that there was no proposal to amend the relevant provisions of law to disclose the name of defaulters and publish the same in the public domain.
The Committee while stressing the urgency of making a clear distinction between willful defaulters and ‘other defaulters,” urged the Government to do away with some archaic provisions. It noted that Section 44 of the State Bank of India Act, 1955 as well as some other Clauses of confidentiality in the relevant laws  prohibit disclosing names of individuals who are defaulters.
However, the names of such persons are shared with the Reserve Bank of India and the Credit Information Bureau.   ”In view of the serious magnitude of  NPAs in the country, there is now an urgent need to amend the law to allow disclosure of defaulters’ name to contain the burgeoning problem of NPAs,” the committee said.
Though various measures have been initiated by the RBI to facilitate public sector banks deal with the problem of growing NPAs, such as Flexible Structuring for Long Term Project Loans, Debt Restructuring Scheme, Scheme for Sustainable Structuring of Stressed Assets and Sale of NPAs to Asset Reconstruction Companies, these instruments, in committee’s views, have not been able to stem the rot.
The Committee suggested that the Finance Ministry in coordination with the RBI should undertake an objective analysis of and evaluation of the effectiveness of these instruments/scheme being implemented by banks to deal with their NPAs.  (AGENCIES)

Follow our WhatsApp channel