HYDERABAD: Suit-filed defaulters owe a staggering Rs 5 lakh crore to banks and financial institutions, according to latest data. About 40% of the Rs 5 lakh crore comprises wilful defaulters, who owe nearly Rs 2 lakh crore as of December 2019, up from Rs 1.6 lakh crore a year before.
A suit-filed case is one where lenders move court when borrowers default loan payments. On the other hand, wilful defaulters are those who deliberately avoid repayments or siphon off or divert borrowed funds for undisclosed purposes.
As of December 2019, there were 20,841 such suit-filed accounts with dues above Rs 1 crore and 11,176 suit-filed cases against wilful defaulters owing Rs 25 lakh and above. RBI has mandated banks and financial institutions to submit the data to credit information firms every quarter.
Of the Rs 2 lakh crore, public sector banks account for 87% or Rs 1.7 lakh crore. State Bank of India has the highest amount of wilful defaults at Rs 45,364 crore (belonging to 1,695 borrowers), followed by Punjab National Bank at Rs 24,169 cr (1,115 borrowers).
Bank of Baroda, Bank of India and IDBI Bank have the next biggest wilful defaults aggregating Rs 43,610 crore.Data updated by credit information firm Cibil on Wednesday showed 77% or Rs 3.8 lakh crore of the outstanding Rs 5 lakh crore is with state-run lenders.
Again, SBI lead the pack with Rs 1.6 lakh crore stuck in 4,855 suit-filed accounts. While PNB didn’t furnish December quarter data, as of September 2019, the outstanding amount stood at Rs 65,372 crore. The latest data comes a day after the RTI query with RBI showing top 50 wilful defaulters owing Rs 68,607 crore, which the Congress alleged was waived off in H1FY20.
Dismissing the allegations, Finance Minister Nirmala Sitharaman said no loan was waived off. “Provisions are made for NPAs as per the four-year provisioning cycle laid down by RBI. Upon full provisioning being done, banks write-off the fully provided NPA but continue to pursue recovery against the borrower. No loan is waived off,” she tweeted late Tuesday. She stressed that from FY10-14, banks wrote off Rs 1.45 lakh crore.
Wilful defaulters are debarred from accessing capital markets or participating in insolvency process. Banks can authorise look-out notices to prevent them from leaving the country.