Written by Staff Writer
28 Apr, 2016 | 9:32 pm
The Indian Supreme Court has requested the Indian government to come up with a proposal for the appointment of a committee to look into the issues raised regarding bad debt and huge write-offs, by public sector banks.
The Reserve Bank of India and the Indian Banks Association have been named as respondents in a public interest litigation petition filed in 2003, which has since been widened to include the RBI, banks and other financial institutions.
A bench comprising of the Chief Justice of India asked the Centre and Reserve Bank of India to respond to various issues raised by senior advocate of the Center for Public Interest Litigation in the matter.
The court also allowed the Indian Banks’ Association, another respondent, to file a response.
The Indian Supreme Court had held in December that RBI cannot withhold information under the “guise” of confidence or trust with financial institutions and is accountable to provide information sought by the general public.
Following this, in February, RBI had said over 1000 billion Indian Rupees was written-off by public sector banks in the last three years.
Experts are of the view that the situation would affect Sri Lanka as well.
Committee on Public Enterprises records cite that loans written-off by state banks in Sri Lanka for the year 2010 alone amounted to about 45.78 billion rupees.
Records also show that during that year, the Bank of Ceylon has written off Rs.12.6 billion as bad debts while the People’s Bank has written off 18.74 billion and the National Savings Bank had written off 2.11 billion rupees in Bad Debts.
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