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‘Will out defaulters, but not for credit card-like debts’

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RBI wants end to bad loans but will not undermine privacy
The Reserve Bank is working on a new system for making public the list of wilful defaulters, while a new mechanism is being put in place for out-of-court settlement of bad loan-related disputes, Governor Raghuram Rajan said on Saturday.
“As a regulator we have no intent or desire to protect malfeasance... We are very happy to make that list public. In fact my people are working on making sure that we can put that list up in an accessible way and also (of) defaulters against whom suit has been filed because that is already public information,” he said while delivering a lecture here.
However, the central bank was in favour of protecting privacy in cases where there is no wrongdoing, he said, adding a blanket edict that everybody’s name should be made public on the website might not be desirable.
He further said it might not be correct to flash the name of all and sundry, including those who forgot to pay their credit bills.
Such persons, Rajan said, could not be clubbed with serious bank loan defaulters otherwise people might start throwing away their credit cards.
“We have to be weary of killing entrepreneurship in this county by putting all unsuccessful risk taking in the same basket. We need risk taking, we need people to take risk,” he added.
Rajan added the RBI is creating a structure for an out of court settlement of the disputes relating to bad debts.
“At RBI, we are creating a structure to help out-of-court resolution and we are still at work, it’s work in progress. We are fine-tuning it, making sure it works,” he said.
Hindustan times New Delhi,09 May 2016

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