Why Is SBI Hiding Names of Big Defaulters?
Time and again, public sector banks (PSBs) in India, which are public authorities defined under the Right to Information (RTI) Act, avoid sharing information about big defaulters. State Bank of India (SBI), while refusing to share names, has still accepted that  it recovered a mere 11% or Rs15,476 crore of the total loan write-offs amounting a massive Rs1,41,248 crore over the past nine financial years.
 
Pune-based activist Vivek Velankar, also a shareholder of SBI, had filed an RTI application asking SBI to share names of those who had defaulted on repayment of loans of Rs100 crore and above. In June this year, SBI flatly refused to share names of big defaulters, discarding even a pretence of accountability under the Act. 
 
Last year, SBI had parted with this information only when he made the demand as a shareholder (Read: SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Paltry Rs8,969 Crore in 8 Years!), but not under the RTI Act.
 
This year, SBI refused to give him information both, as an RTI applicant and a shareholder of the Bank. Sham K, assistant general manager for compliance and company secretary of SBI, said, "As Bank is under statutory and regulatory obligations to maintain the confidentiality of customer data, the Bank is not in a position to share the account or customer-specific information."
 
On filing an appeal, the first appellate authority (FAA) partly upheld Mr Velankar’s appeal and shared information on debt written off and recovery made over the past nine years.
 
The information shows that between FY12-13 to FY20-21, SBI has written off loans worth Rs1,41,208 crore and recovered just 11% or Rs15,506 crore from big defaulters. 
 
 
As for defaulters, the CPIO wrote, "The information sought is related to third parties including commercial confidence or trade secrets and is exempted from disclosure under section 8(1)(d)(e) and (j) of the RTI Act." The CPIO further told Mr Velankar to search SBI's annual reports to find information on written off accounts and recoveries. 
 
Mr Velankar, who is president of the Pune-based Sajag Nagrik Manch, says, "If this indeed is a matter of confidentiality or fiduciary relations, then how did SBI give me the entire list with names and why not this year? When a common borrower defaults, the same banks publish his name and details through newspaper advertisements. Why do they want to keep the names of defaulters hidden? Why doesn't the 'confidentiality' or 'fiduciary' clause apply while publicising the names of common borrowers?"
 
Former central information commissioner and RTI activist, Shailesh Gandhi, has been quite vocal about the misuse of Section 8(1)(j) by PIOs to deny information. While speaking at a webinar organised by Moneylife Foundation, he reiterated, "Everybody will have their various interpretations. In my opinion, that is why a proviso was given only for Section 8 (1)(j), which said that 'provided the information which cannot be denied to the Parliament or state legislature should not be denied to any person'."
 
According to the analysis done by Mr Velankar, during the past nine financial years till FY20-21, SBI wrote off debts worth Rs2.69 lakh crore and recovered just 16.69% or Rs44,974 crore from defaulters. 
 
 
Technically speaking, when debts are written off, they are removed as assets from the balance sheet because the bank does not expect to recover payment.
 
Experts frowned upon this practice but it is routinely done by banks as part of their tax management clean-up process. The beneficiaries are invariably some of our biggest industrialist defaulters. 
 
In contrast, when bad debt is written down, some of its value remains an asset because the bank expects to recover it. However, as SBI has shown, there is negligible recovery for the amounts written off most of the time. 
 
An aggrieved Mr Velanakar says, "If a bank has practically lost hopes of recovery and has, hence, written off the loan, why should such a loan get the shield of secrecy? When a common borrower defaults, the same bank publishes his name and details through advertisements in newspapers. Why then are the names of bigger defaulters protected? Why don't the 'confidentiality' and 'fiduciary relation' clauses apply while publicising the names of the common borrowers?"
 
As reported by Moneylife, several banks and financial institutions are using all possible ways and means to keep their records hidden from public view. 
 
Such write-offs also debunk the aggressive posturing by the government and policy-makers about their so-called recovery efforts.
 
All this shows an underhand nexus between the banks and the defaulters as a distinct possibility and merits investigation at the highest level.
 
You may also want to read our exclusive coverage on bank loot
Comments
dineshbhasker
3 weeks ago
Benefit of secrecy for depositers is wrongly given to big financial criminals. But then SBI is following big brother RBI . The country it's political financial and legal system belongs to the corporates.
na.acharya2104
3 weeks ago
Is there one law for the common man & another law of the rich & none for influential of this country ?
& Our courts r occupied with petty thefts !
Ezeelok
Replied to na.acharya2104 comment 3 weeks ago
Obviously with no doubt !
angelo.extross
3 weeks ago
How can banks follow "double-standards'? When a common citizen (read middle class) fails to repay,
the banks flash advertisements in newspapers WITH the photograph and all details of the "defaulter"
The same banks plead "secrecy" in the case of big defaulters.
The Hon'ble Supreme Court would fail in its duty if it does not take "sue moto" cognizance of these
double standards adopted by the banks.
Ezeelok
Replied to angelo.extross comment 3 weeks ago
Agreed Sir. Please don't forget logic doesn't work with crooks & corrupts. In fact the law should be that along with defaulters , even bank officials who after taking bribes had sanctioned loans must also be named and shamed.
sowmyaksb
3 weeks ago
We must demand to amend the Rule of confidentiality, the customer will lose all such privilege once he defaults to repay either the interest or the Principal. Apart from that, even who applies for restructuring or One time settlement ..
Ezeelok
Replied to sowmyaksb comment 3 weeks ago
Absolutely.
sathya2011
3 weeks ago
The information flow is not seamless in any government owned agencies and it is becoming worse as time progresses. See the case of a public fund where they refuse to divulge any details and absolve themselves from legal provisions.
parimalshah1
3 weeks ago
Why are the courts and chief justice of India not taking any suo moto action?
Ezeelok
Replied to parimalshah1 comment 3 weeks ago
Cash walks BS talks and talk is cheap with no substance.
yerramr
3 weeks ago
In this growing digital world, holding up information that has public interest, should be treated as a punishable offence. But this requires change in the Bankers' Book of Evidence Act. Banks' classification of wilful defaulter - a precursor to treating the account as NPA - is governed by the RBI regulations. RBI, though provides for the defaulter to be heard by a high-level committee of the concerned Bank, rarely happens and even if happened, does not become part of the records of evidence when issues are raised in the Courts of Law. Once an account becomes NPA, it moves to the control of a top executive who has no relationship with regular operations. It is dealt with by Stressed Accounts Management Branch of the Bank whose main business is recovery of the asset. Now that a Bad Bank is set up, all these accounts would move perhaps to that bank. In any case, Banks are scared to disclose the information relating to the defaulters as their own complicity comes into open discussion.
Nahom
3 weeks ago
Parasite Banksters.
mudit3
3 weeks ago
The government and its companies are the biggest defaulters. For eg. Air India
Ezeelok
3 weeks ago
What more can one expect from a highly corrupt Banking System , equally corrupt Bureaucracy blessed by Italian Mafia , PC Madrasi and bought out politicians ?

Poor Middle Class Tax Paying fraternity like ke us has to suffer because of dishonest bankers !!

God Bless the Country
FRANCISXAVIER
Replied to Ezeelok comment 3 weeks ago
so from 2014-2021 Italian Mafia , PC Madrasi control the banks? What's stopping the highly efficient(?) bjp govt from disclosing big defaulter's details and bring transparency in the past 7 yrs? why bjp govt protecting Italian Mafia, PC Madrasi and not taking actions against the corrupt bankers?
sundarbtw
Replied to FRANCISXAVIER comment 3 weeks ago
Well said...
prasanna
3 weeks ago
Why is the re a difference between the two tables?
S.SuchindranathAiyer
3 weeks ago
SBI concealing names of big defaulters: Government loots bank depositors money with impunity. Enforces perverse interest rates to rob customers by paring them less than the Government induced inflation rate and then covers up the names of big defaulters because they are not Vijay Mallya or Viral Modi but more likely related to Neta-Babus? A Government that has no second thoughts about bouncing my cheques arbitrarily and without notice because the Bank has not been given a copy of my Aadhar card which was submitted three years ago without asking for it or warning me?
Ezeelok
Replied to S.SuchindranathAiyer comment 3 weeks ago
Well said Sir.

Thanks to corrupt officials.
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