Banks May Find Informers to Track Defaulters

For many years, informers are helping law enforcement agencies, tax authorities etc. Today, banks are also looking at them for help. Recently, Reserve Bank of India (RBI) has sought the Indian Bank’s Association’s views on whether banks can find such sources to tap the defaulting borrowers who have contended with assets. Banks are being asked for seeking information from the public regarding assets owned by defaulters as also to reward persons giving such information.

According to RBI, the growth rate of bad loans in 2011-12 was 25.5 percent which was more than triple the average growth rate of 7.4 percent in the same first half period in 2006-12. That is, bad loans increased to Rs.97,922 crore as on 2011 from Rs.84,968 crore as on March-end 2010.

According to expert legal opinion, once a bank files recovery proceedings, there would be no privacy and the matter is in public domain. So, the public at large are to adopt all legal means to ensure that the defaulter’s assets are disclosed. Also, banks should discuss the matter with the defaulting borrower and destroy all conciliatory methods to recover its dues before it resorts to the extreme step.