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Finance Ministry seeks access to big borrowers' database, RBI denies permission

Finance Ministry seeks access to big borrowers’ database, RBI denies permission

NEW DELHI: The government and the central bank are in another dispute — this time over access to a database of borrowers with loans exceeding Rs 5 crore. The finance ministry has asked the Reserve Bank of India to provide information on all such borrowers. The ministry says this is to monitor the process of sanctioning loans, among other reasons.

The information is contained in the Central Repository of Information on Large Credits, which was set up by RBI as one of the measures to prevent borrowers from gaming the system while seeking loans. Reserve Bank has not shared this information with the ministry. Senior officials familiar with this matter spoke to ET on the condition they not be identified. Emails sent to the spokespersons of the finance ministry and RBI did not receive any response.

If RBI agrees to the finance ministry’s request, the government will get details of all loans taken by large borrowers across banks as well as their credit rating and asset classification. Such access will help keep a check on loan sanction procedures and in taking up cases if there are any vigilance issues, said a government official familiar with the matter.

“It is a pre-emptive action rather than looking into the details once the account has become a non-performing asset due to various reasons,” the official said, adding that in the case of some prominent wilful defaulters, banks were caught unawares or had taken few steps to secure collateral. “RBI is not too keen to share the information,” said the government official.

The ministry justified the move to seek the data on the grounds that it will help the government address systemic sector-specific issues, an argument that officials said did not convince RBI. “Such information will help us take proactive steps if required in cases where government intervention is needed so that loan disbursement is not stuck because of policy issues,” said one of the officials, who did not wish to be identified.

“We keep getting requests from borrowers, where a loan has been sanctioned but disbursement is stuck because the project does not have environmental clearance or other related issues. If we are aware of the issues, we can fasttrack the process and hold inter-ministerial consultations to get those issues resolved,” the official said. On Saturday, RBI Governor Raghuram Rajan said the central bank is working on a new mechanism to make public the names of wilful defaulters, although he noted that the regulator is in favour of protecting privacy in cases where there is no wrongdoing.

According to government data, the top 50 defaulters of public sector banks had borrowings in excess of Rs 1.21 lakh crore as of December 2015. Bankers, too, expressed concern over giving the government access to CRILC data. “As promoters they can ask for sector-specific information or if there is any vigilance issue, then even case-specific details, but access to all data is avoidable,” said the managing director of a state-run lender.

Banks have to necessarily furnish credit information to CRILC on their borrowers with aggregate fund-based and non-fund based exposure of Rs 5 crore and above, failing which RBI can penalise them. State Bank of Travancore was fined Rs 1crore in January 2016.

Courtesy : economictimes.indiatimes.com



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