The Central Information Commission has directed the Reserve Bank of India to make public the names and other details of top 100 industrialists of the country who have defaulted on loans from public sector banks.

The Commission also directed the central bank to post on its website complete information on all such industrialists as part of suo motu disclosure mandated under section four of the RTI Act before December 31 and asked it to update it every year.

The RBI had objected to making this information public saying it is held by it in fiduciary capacity and disclosing it would adversely affect economic interest of the state.

Information Commissioner Shailesh Gandhi agreed that information is fiduciary in nature but said that such exemption does not stand when there is larger public interest in the disclosure.

“There can be no doubt that the information on defaulters received from banks are held by the Reserve Bank in a fiduciary capacity and are confidential in nature,” an RBI official had said while responding to an RTI application from P.P. Kapoor of Panipat, Haryana.

Mr. Kapoor had sought to know from the RBI the details of default in loans taken from public sector banks by various industrialists besides list of defaulters, top 100 defaulters, name of the businessman, address, firm name, principal amount and interest, date of default and date of availing loan.

During the hearing, Mr. Gandhi asked the RBI if the information about loan defaulters is held by it as part of statutory requirements. The Public Information Officer admitted that the Banks were providing the information in fulfilment of statutory requirements.

Mr. Gandhi in his detailed order said, “In fact, information about industrialists who are loan defaulters of the country may put pressure on such persons to pay their dues. This would have the impact of alerting citizens about those who are defaulting in payments and could also have some impact in shaming them.”

He said there is no doubt that details of top industrialists who have defaulted in repayment of loans must be brought to the citizens’ knowledge and there is certainly a larger public interest that would be served on disclosure of the same, hence clause of fiduciary information does not stand.

“This (disclosure) could lead to safeguarding the economic and moral interests of the nation. The Commission is convinced that the benefits accruing to the economic and moral fibre of the country, far outweigh any damage to the fiduciary relationship of bankers and their customers if the details of the top defaulters are disclosed,” he said.

He said the Commission is aware that information on defaulters is being shared by Reserve Bank with an organisation called CIBIL adding that “it is difficult to understand the reluctance to share this information with citizens using RTI”.

The Commission also rejected the contention that disclosure would adversely affect economic interest of the state saying “if it means that such borrowers would not bank with public sector banks for fear of exposure, it would in fact be in the economic interest of the nation.

“It is also unlikely that the economic wellbeing of the nation could get affected adversely by disclosing the names and details of defaulters. The Indian economy is dependent on far stronger footings,” he said.

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