The top-50 wilful defaulters owed a total of Rs 92,570 crore to Indian banks as of March 31, 2022, Minister of State for Finance Bhagwat Karad told Lok Sabha. He added that fugitive diamond merchant Mehul Choksi-owned Gitanjali Gems defaulted on loans worth Rs 7,848 crore.
In a written reply to a query in the Lok Sabha, Karad shares a list of wilful defaulters in India citing data from the Reserve Bank of India.
A wilful defaulter is the one who was capable of returning the loan but did not do so. According to the RBI, the ‘wilful default’ would be deemed to have occurred if any of these events is noted:
(a) The unit has defaulted in meeting its payment / repayment obligations to the lender even when it has the capacity to honour the said obligations;
(b) The unit has defaulted in meeting its payment / repayment obligations to the lender and has not utilised the finance from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes; and
(c) The unit has defaulted in meeting its payment / repayment obligations to the lender and has siphoned off the funds so that the funds have not been utilised for the specific purpose for which finance was availed of, nor are the funds available with the unit in the form of other assets.
Top-10 Wilful Defaulters In India As On March 31, 2022:
1) Mehul Choksi’s Gitanjali Gems (Rs 7,848 crore)
2) Era Infra (Rs 5,879 crore)
3) Reigo Agro (Rs 4,803 crore)
4) Concast Steel and Power (Rs 4,596 crore)
5) ABG Shipyard (Rs 3,708 crore)
6) Frost International (Rs 3,311 crore)
7) Winsome Diamonds and Jewellery (Rs 2,931 crore)
8) Rotomac Global (Rs 2,893 crore)
9) Coastal Projects (Rs 2,311 crore)
10) Zoom Developers (Rs 2,147 crore)
According to the RBI, wilful defaulters are not sanctioned any additional facilities by banks or financial institutions and their unit is debarred from floating new ventures for five years.
Wilful defaulters and companies with wilful defaulters as promoters or directors are barred from accessing capital markets to raise funds through the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2016.
Total Non-Performing Assets
Finance Minister Nirmala Sitharaman on Wednesday in Rajya Sabha said gross NPAs of banks fell to 6-year low of 5.9 per cent, as percentage of the total advances, piin March 2022:
Public sector banks’ gross NPAs peaked at Rs 8.9 lakh crore after the asset quality review undertaken by the central bank. The NPAs have now declined to about Rs 5.41 lakh crore as on March 31, 2022.
Banks try to recover bad loans but when there is no scope for recovery, lenders typically write off loans. According to RBI data, banks have written off Rs 10.09 lakh crore in the last five financial years. State Bank of India (SBI) wrote off Rs 2 lakh crore in the last five financial years, Punjab National Bank Rs 67,214 crore followed by IDBI Bank, which wrote off Rs 45,650 crore.
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