The Reserve Bank of India is in the works of placing a new mechanism to make public the list of wilful defaulters along with a system for out-of-court settlement for disputes related to sticky loans as per governor Raghuram Rajan. Although, he has ruled out making all names public, arguing that clubbing serious defaulters with those who forget to pay their credit card bills could result in people throwing away their cards.
In a lecture, he insisted that the bank was leaned in favour of protecting privacy in cases where there is no wrongdoing. “As a regulator we have no intent or desire to protect malfeasance. We are very happy to make that list public. In fact, my people are working on making sure that we can put that list up in an accessible way and also (of) defaulters against whom suit has been filed because that is already public information,” he said. The statements are a mere echo of the regulator's stance before the Apex Court where it submitted the names of large defaulters in a sealed cover and asked cover and has asked the court not to make them public amid demands to name and shame evaders.
The RBI has been pushing banks to classify several accounts as non-performing, which has impacted profitability of lenders and caused several of them severe losses. We need risk taking, we need people to take risk, Rajan said. “At RBI, we are creating a structure to help out-of-court resolution and we are still at work, it's work in progress. We are fine-tuning it, making sure it works,” Rajan said. He credited the government for pushing the new Bankruptcy Code, which was cleared by the Lok Sabha earlier this week. The new legislation seeks to speed up restructuring and exit for promoters.
