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LATEST NEWS UPDATES | SC asks RBI for details of firms that have defaulted on loans of over Rs 500 crore -Shreeja Sen

SC asks RBI for details of firms that have defaulted on loans of over Rs 500 crore -Shreeja Sen

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published Published on Feb 16, 2016   modified Modified on Feb 16, 2016
-Livemint.com

The Supreme Court has asked RBI to submit the information within six weeks

New Delhi:
The Supreme Court (SC) on Tuesday asked the Reserve Bank of India (RBI) to furnish details of companies that have defaulted on loans amounting to more than Rs.500 crore in sealed covers within six weeks.

The court made the central bank a party to a 2005 case related to bad loans advanced to a few companies by the state-owned Housing and Urban Development Corp. Ltd. The case was filed by the Centre for Public Interst Litigation (CPIL).

The order was passed by a bench comprising Chief Justice of India, T.S. Thakur, and justices R. Banumathi and U.U. Lalit.

Lawyer Prashant Bhushan, representing CPIL, told the court that about Rs.40,000 crore of corporate debt was written off in 2015. The court observed that bad debts were plaguing public sector banks.

For the quarter ended 31 December 2015, profits of several public sector banks tumbled after RBI directed banks to reclassify loans and set aside more money against stressed assets.

Listed banks added nearly Rs.1 trillion in bad loans in the December quarter, amounting to a 29% increase in the stock of sticky assets from end-September, as lenders responded to an RBI call to accelerate recognition of stressed assets.

Gross non-performing assets (NPAs) of 39 listed banks surged to Rs.4.38 trillion for the quarter ended 31 December 2015, from Rs.3.4 trillion at the end of September, according to data collated by Capitaline. Provisions against bad loans surged by 90% between the September and the December quarters.

The aggregate net profit of the 39 listed banks fell 98% to Rs.307 crore in the December quarter from Rs.16,806 crore in the year earlier.

The 24 public sector banks were the worst performers, having reported an aggregate loss of Rs.10,911 crore in the December quarter compared with a profit of Rs.6,970.8 crore in the year-ago quarter.

Livemint.com, 16 February, 2016, http://www.livemint.com/Industry/MChpJbCK84ipuKG8uT3KSP/Supreme-Court-asks-RBI-to-furnish-details-of-bad-loans.html


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