New Delhi: The Supreme Court on Tuesday asked the Centre, the RBI and the Indian Banks Association (IBA) to come out with a mechanism for the recovery of outstanding bank loans from defaulters.
A three-judge bench of Chief Justice T.S. Thakur and Justices R. Banum-athi and Uday Lalit asked Solicitor-General Ranjit Kumar for the Centre and counsel for RBI and IBA to suggest appointment of a committee of experts to go into the issue.
The CJI told the counsel, “We are not financial experts to suggest safeguards. Today there is no mechanism to recover loans from people who had taken thousands of crores and are in default. The government must come out with adequate safeguards to protect people’s money and ensure that settlement is not done which is not in banks interest. Some amendments in the laws are necessary. You can constitute a committee. The present system is not working properly.”
Prashant. Bhushan, appearing for Centre for Public Interest Litigation told the court, that they have raised important issues, such as “what mechanisms are required to ensure that banks obtain adequate security for the loans that they give to companies?”
