Supreme court and RBI on making the list of defaulters public

Sharing the names of large bank loan defaulters: Need of the hour.

RBI argued the case of big defaulters in Supreme Court and put forward two pronged arguments to prevent making the names of big defaulters’ public:

1  There is more and more decentralization of the functions of the central bank and therefore it was a "herculean task" for it to get data from all banks.

This should not be the reason for preventing the disclosure of names of these big defaulters, for two reasons:

a.    All this data is regularly available with RBI as part of various reporting systems from banks

b.    Banks themselves may me made mandatory to publish, at least their top defaulters names, as part of their financials. This can include top NPAs / SMAs above a cut off amount.

    RBI is claiming confidentiality. If it is some law coming in the way of disclosure of such vital information needed, the law needs to be amended in the public interest.

The NGO society for public interest is really doing a yeomen service to the society. Publishing defaulter’s data will create awareness among the public about these companies and aids their investment decision, especially listed companies.

Corporate structure of business is basically built on trust and ethical values in the form of corporate governance.  However,Today these are totally missing. Ushering in transparency and ethics in business is the need of the hour. Government and Hon Supreme Court are really working in this direction which is a very welcome move.

Throughout the history we have seen, the powerful sections of the population making rules which are for the powerful, by the powerful. Society accepted them as law and must abide. Then, changes came with changing time. Transparency and good governance demands such disclosure. This will bring a cultural change in the society/economy and improves our rating in the ease to do business.

RBI's stand is surprising . Probably RBI is fearing of short term adverse impact it may have on such defaulting companies or banks having such large exposure under threat. Whatever it is there is need to bite the bullet at some point or other. Cancer cannot be cured by cosmetic cover. That needs surgery. 

Best Regards.