Banks lodge FIRs against 3,154 wilful defaulters

New Delhi, July 10: Public sector banks have lodged First Information Reports (FIRs) against 3,154 wilful defaulters till March 31, the Finance Ministry has said.

Wilful defaulters are classified as firms or individuals who own large businesses and deliberately avoid repayments.

According to the Finance Ministry's data, still wilful default loans stood at Rs 1.50 trillion in 2018-19.

The State Bank of India saw the highest number of wilful defaults at Rs. 46,158 crore, while Punjab National Bank stood second at Rs. 25,090 crore, with Bank of India at Rs. 9,890 crore.

The Reserve Bank of India (RBI) data says that gross loans and advances in PSBs was RS. 63,820 crore as of March 31, 2019.

Finance Minister Nirmala Sitharaman on Monday had told Lok Sabha that the number of wilful defaulters in nationalised banks increased by over 60 per cent to 8,582 in five years to March 2019.

Rising consistently since 2014-15, the number of such borrowers increased to 6,575 in 2015-16; 7,079 in 2016-17 and further to 7,535 in 2017-18.

It's notable that after high-profile wilful defaulters like liquor baron Vijay Mallya, jewellers Nirav Modi, and Mehul Choksi fled from India, the Narendra Modi-led government has tightened norms against wilful defaulters.

To strengthen PSBs, the Government has implemented a comprehensive 4R's strategy consisting of recognition of NPAs transparently, resolution and recovering value from stressed accounts, recapitalising PSBs, and reforms in PSBs and financial ecosystem to ensure a responsible and clean system.

Wilful defaulters are not sanctioned any additional facilities by banks or financial institutions, and they are debarred from launching ventures for five years.

The government has debarred wilful defaulters and companies with wayward borrowers from accessing capital markets to raise funds or participate in insolvency resolution process.

After the norms have been tightened, the positive results are becoming visible.

Minister of State, Finance, Anurag Singh Thakur on Tuesday told Lok Sabha that gains to PSBs are amply visible in their growing financial strength.

"As per RBI data on global operations (including provisional data for March 2019, as reported on 2.7.2019), gross NPAs of PSBs have reduced over the last financial year by Rs. 1,06,032 crore, record recovery of Rs. 3,09,568 crore has been effected over the last four financial years (excluding recovery in IDBI Bank Limited made during 2018-19), and domestic credit growth has risen to 10.20% during financial year 2018-19," he said.

The Minister further added that growing strength of PSBs is also evident from the fact that all PSBs meet minimum regulatory capital requirement, 6 PSBs are now out of PCA (prompt corrective action) restrictions, balance-sheets of PSBs have been cleaned up through transparent recognition of NPAs and their provision coverage ratio is at its highest level in seven years, and asset quality has improved sharply.