The State Bank of India (SBI) has again refused to appoint a borrower who is in debt of more than 100 rupees, even to shareholders. In the last nine years from 2014 to 2010, SBI amortized non-performing loans of more than Rs 145,248 from large borrowers and recovered more than 13% from these large borrowers.
SBI told social activist and shareholder Vivek Velankar: “Banks have legal and regulatory obligations to protect the confidentiality of customer data, so we cannot disclose the information we ask for.” It makes a small borrower. All lenders regularly publish restructuring advertisements in newspapers with personal information and photos of small borrowers in default. The stubborn protection of large borrowers or large defaulters under various excuses is embarrassing.
Many individuals, including Velankar, have submitted numerous RTI requests to the PSB to publish the names of large debtors. But so far, banks have refused to appoint huge debtors because of “customer data privacy.” Perhaps the confidentiality clause applies only to large debtors, not to small borrowers. For small borrowers, the data and photos will be repeatedly published in the newspaper with a recovery notice.
In 2020, after not receiving a list of the names of major defaulters, Velankar sought information from SBI shortly before the Annual Meeting (SBI). At that time, SBI shared the names of its major debtors, Alok Industries Ltd, Bhushan Power & Steel Ltd, IRVCL Ltd and Videocon Industries Ltd.
But in 2021, SBI simply named the large debtor his shareholder. Refused to share. In response, Sham K, Associate General Manager and Corporate Secretary for Compliance at SBI, told Velankar: Or custom information.
He is the same SBI employee who refused to publish the list of major debtors this year. In addition, Sham K refused to provide information on loans amortized and collected by banks since 2013.
“Information is not centrally collected and maintained by banks,” he said in Velankar’s reply.
Velankar, president of Pune-based Sajag Nagrik Manch, said: But then the bank refused to disclose the names of the large defaulters. Does this mean that the SBI definition of debtor confidentiality changes every year? And why did the bank technically cancel its debt because it hid the name of the defaulted large borrower and had no chance of repayment?
444 He also searched SBI’s annual report for the past nine years. “Since 2014, SBI has only recovered Rs 54,205 from these debtors, while bad debts have amortized Rs 278,605. The federal government has found that it is illiquid owned by banks or financial institutions. National Asset Reconstruction Ltd (NARC) was established as a bad bank to buy targeted and risky assets (usually bad debt-bad debt), but given SBI’s huge amortization debt, the government is a bank. We need to set up another bad bank just for the sake of it, “he says.
Technically, when the debt is amortized, the debt is removed from the balance sheet as an asset because the bank does not expect the payment to be recovered.
This practice is disliked by professionals, but banks routinely follow it as part of the tax administration cleanup process. Without exception, beneficiaries are some of our biggest default businessmen.
In contrast, if a non-performing loan is amortized, the bank expects it to be recovered, so some of the value of the non-performing loan remains as an asset.
Such write-downs also reveal the willingness of governments and policy makers to so-called reconstruction efforts.
All of these represent a clear possibility of fraudulent connections between banks and defaulters and deserve a high level of investigation.