ADVERTISEMENT

Wilful Defaulters Owe State-Owned Banks Rs 91,155 Crore, Says Government

There were 9,130 willful defaulters in the country till December 31, 2016

A customer holds a bundle of Indian rupee banknotes while filling in a deposit form in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)  
A customer holds a bundle of Indian rupee banknotes while filling in a deposit form in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)  

There were 9,130 wilful defaulters in the country who had taken loans amounting Rs 91,155 crore from various public sector banks, Minister of State for Finance Santosh Gangwar said in Lok Sabha, according to wire agency PTI.

Replying to a question about the action taken against Vijay Mallya, Gangwar, without taking his name, said the person whose name was mentioned was given loans in September 2004 and this was reviewed in February 2008.

Loans to the tune of Rs 8,040 crore were given to the liquor baron when the previous United Progressive Alliance (UPA) government was in power, but action against him for defaults is being taken by the Modi government, the minister said. This loan was declared as a non-performing asset in 2009 and the NPA was restructured in 2010.

"Our government has taken action against him. He is currently living in the U.K. Various agencies have issued summonses to him. Following our requests, the Ministry of External Affairs has revoked his passport and we are taking action so that he faces justice," he said during Question Hour.

The minister said among the 9,150 willful defaulters of PSU banks, suits were filed against 8,364 defaulters who had taken loans amounting Rs 85,258 crore. FIRs were lodged against 2,024 willful defaulters who had taken loans worth Rs 29,557 crore, Gangwar said.

Action against 6,207 willful defaulters was taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, he said.

The comments from Gangwar come against the backdrop of attempts to clean up more than Rs 7 lakh crore in bad loans. These bad loans are divided into two broad categories - those borrowers who are unable to repay due to genuine difficulties and those who are ‘wilful defaulters’ despite having the ability to repay. Data provided by Gangwar suggests that the latter accounts for under Rs 1 lakh crore in bad loans.

Banks have been given a large number of tools to deal with wilful defaulters. By labeling a borrower as a wilful defaulter, lenders can cut off the access such firms and promoters have to the banking sector and the financial markets. The fear of such measures can often help in quicker recoveries from the defaulters.

With inputs from PTI