Mumbai: It has emerged from recent data that out of the bad loans in public sector banks (PSBs), 14% are due from willful defaulters. . The total gross non-performing assets (NPAs) of 21 PSBs stood at Rs 7.33 lakh crore as on September 30, 2017. Of this, Rs 1.01 lakh crore of loans were termed as those in willful default. They are from 9,025 accounts.
As per data released by the RBI in response to a Parliament query, there are 1463 accounts belonging to those who are in default by Rs 100 crore or higher.
Willful defaults are those cases where the borrower has reneged on the agreement on using funds or has not paid despite having resources. Recovery from such accounts is difficult because in many cases the money is siphoned off from the books of the defaulting company and most of them are being fought in courts.
Leading the table with the highest amount of bad loans is State Bank of India (dues of Rs 77,538 crores under 265 accounts). However, among the banks with highest number of willful defaults, Vijaya Bank stood highest. The bank had NPAs worth Rs 6,649 crore as on September 30, 2017. Of this loans amounting to Rs 3,537 crore were on account of willful defaults.
Punjab National Bank has the highest share of willful defaults in its books among the larger banks. Of its bad loans worth Rs 57,630 crore, 25% are on account of borrowers who have deliberately defaulted.
Of the 9,025 cases of willful defaults in public sector banks, lenders have filed cases against 8,423 for recovery of Rs 95,384 crore of NPAs (Non-performing Assets). They have also filed 1,968 police complaints in cases of loan amounts totaling 31,807 crore. In 6,937 accounts, representing an outstanding of Rs 87,458 crore, banks have also initiated proceedings to attach and sell assets.
Once a commercial entity is declared a willful defaulter, it will not be able to get bank loans as long as they have the tag. For a lender, declaring a borrower as a willful defaulter is a complicated process with senior bankers having to give a hearing to the borrower. In several cases, courts have ruled against the labeling of the borrower due to shortcomings in the process.
As on September 30, 2017, leading corporate houses accounted for approximately 77% of the total gross NPA from domestic operations for banks in India.