The Reserve Bank of India should not keep information on wilful loan defaulters under wraps but share it with depositors under the Right to Information Act, according to the All India Bank Employees Association.
The trade union body is of the view that banking secrecy rules should not come in the way of revealing the names of the defaulters as banks have given them loans with depositors’ money. Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, alleged that a nexus between borrowers, politicians, bureaucrats and bank top managements has spawned the phenomenon of wilful loan defaults.
Cash flowA borrower is classified as a wilful defaulter if he does not pay his dues despite adequate cash flow and good net worth; siphons off funds to the detriment of the defaulting unit; misrepresents or falsifies records; disposes or removes securities without bank’s knowledge; and conducts fraudulent transactions.
The Federation wants accountability fixed on top bank officials involved in making loans to companies which have wilfully defaulted.
Utagi said wilful default should be made a criminal offence under the Indian Penal Code so that borrowers have fear of law.