Reserve Bank of India (RBI) Governor Raghuram Rajan said on Sunday the central bank is currently working on a system for publicly declaring the list of wilful defaulters. In addition, a new mechanism is being wrked out for out-of-court settlements in bad-loan disputes.
The RBI, however, is reportedly in favour of protecting identities in cases where there was no established wrongdoing. According to Raghuram Rajan, it might not be a good idea to "flash" names of those people who forgot to pay credit-card bills, Press Trust of India.
"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 who suit has been filed because that is already public information," Rajan was quoted as saying by PTI.
Rajan went on to add that people who forget to pay their card card bills must not be listed in the same category as wilful defaulters, otherwise they would start throwing their credit cards away. He said there had to be reluctance to killing entrepreneurship in India. "We need risk-taking, we need people to take risks," he said.
In addition to creating a structure for out-of-court settlement, he said banks in India did not have enough power to persuade company promoters to pay loans.
"Till recently the threat that banks could make to promoters was meaningless, which is why promoters could go to bankers and say take 25 paise on the rupee, otherwise I will see you in court for the next 15 years," PTI quoted Rajan as saying.