Financial Daily from THE HINDU group of publications
Sunday, May 25, 2003
Financial Daily from THE HINDU group of publications Sunday, May 25, 2003 |
|
|
|
|
|
Home Page
-
Industry Associations Money & Banking - Non-Performing Assets Spare `unwilful' defaulters: India Inc K.R. Srivats
NEW DELHI, May 24 `DISCLOSURE' continues to be a dreadful word for India Inc, whether it be in respect of reporting of financial activities to shareholders and stakeholders or for that matter the publishing of names of defaulter-borrowers. A section of India Inc has started mounting pressure on the Reserve Bank of India to distinguish between "wilful and unwilful defaulters" before the names of the defaulter-borrowers are published in appropriate media. An industry official said that banks had started inserting a new clause in their loan agreements that would give banks and RBI unfettered right to disclose or publish the name of the defaulter borrower, which includes the name of the company/firm/unit and its directors/partner/proprietors. Taking up the cause of `unwilful defaulters' are chambers such as the PHD Chamber of Commerce and Industry (PHDCCI), which are making a case for the RBI to advise banks to make necessary corrections in the concerned clause of their loan agreements to ensure that "unwilful defaulters and borrowers not adjudged as defaulter by a court of law" are not covered. The PHDCCI has justified its demand for sparing the `unwilful defaulter' by highlighting that the default can be due to circumstances beyond the control of a borrower — economic environment, market forces, liberalisation and cyclical factors. A default could also arise due to disagreement/dispute on the amount outstanding between lender and borrower. The RBI has already defined a wilful defaulter and there is a view among certain sections of India Inc that this definition must be used as a test for determining the names of `wilful defaulters' that can be published.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|