New Delhi: The Supreme Court on Tuesday sought response from the Centre on issues framed by an NGO on matters like defaulted loans, their recoveries and restructuring by PSU banks, saying that the present system is not "perfect".
"Tell us about mechanism for recovering the dues. There may be some mechanism to deal with it. There is also a need of amendments. Suggest the ways and means by which these things can be prevented," a bench comprising Chief Justice T S Thakur and Justices R Banimathi and U U Lalit said.
"We are trying to highlight the issues as there is something not working. If your system would have been perfect then things would not have happened," it said while referring to the huge amount of bad loans.
The observations came when Prashant Bhushan, appearing for NGO 'Centre for Public Interest Litigation', referred to the issues to be considered by the court. The issues were framed by him in pursuance of an earlier order.
Bhushan, in his suggestions, said, "Whether, in view of the judgment..., RBI can refuse to disclose information about defaulted loans, suits filed for recovery of loans, restructured loans, debts written off, wilful defaulters, One-Time-Settlement, sales of assets of companies to Asset Reconstruction Companies etc.?"
He also framed the issue as to what mechanisms are required to ensure that banks obtain "adequate security for the loans that they give to the companies/corporates?"
One of the issues reads, "Whether the personal guarantees of the promoters should be required to be taken in loans given to the corporates?"
Solicitor General Ranjit Kumar, appearing for the Centre, sought time to respond to the issues framed by Bhushan and said, "we would also like to frame our own issues."
He also said that the Centre is in the process of amending laws to safeguard banks against write offs and NPAs.
The bench, during the hearing, also suggested to Centre to consider setting up of a committee of experts which would go into the entire gamut of issues and said that it is not an "expert".
The matter has now been fixed for further hearing on July 19....