NEWS & ADVICE : PERSONAL LOAN
Banks to make the names of defaulters publically available
By Vaibhav Aggarwal
Aug 21, 2012
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Increasing load of nonperforming assets and higher defaults on payments has resulted in banks making a public disclosure of people who have taken loans from the bank but have default on payment.

Responding positively to ministry of corporate affairs (MCA) suggestions, the Indian Banks' Association (IBA) stated the banks were willing to make public disclosure of such borrowers.

The move would make an improvement in the current scenario where disclosures on defaulters can only be made public by implementing legal provisions. MCA further stated that availability of credit information of companies would enable the investors to judge the quality of the investment in a better manner.

MCA recently made the names of companies and their directors on its website. Banking regulator also maintains records of such companies as bad, nonperforming asset and defaulting companies. Such information is also maintained by credit information companies like CIBIL; but they only share information with banks and FIs and do not publish them for public domain.

A senior official with a PSB stated that though many of the cases of default on payments are genuine, but some business owners take advantage of the negative business environement and default despite having capacity to pay back. Also due to the economic scenario, the slippages have gone up.


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