2,426 wilful defaulters owe Rs 1.47 lakh crore to state-owned banks, reveals bank union

2,426 wilful defaulters owe Rs 1.47 lakh crore to state-owned banks, reveals bank union

As many as 2,426 wilful defaulters owed over Rs 1.47 lakh crore to 17 public sector banks, a leading bank labour union revealed on Saturday.

Gitanjali Gems, promoted by Mehul Choksi, which owes Rs 4,644 crore to Punjab National Bank topped the list of wilful defaulters, according to the All India Bank Employees Association. Gili India and Nakshatra Brands, which were also a part of the Gitanjali Group, owed Rs 1,447 crore and Rs 1,109 crore each to the state-owned lender, the list showed.

The data was based on a report by Central Repository of Information on Large Credits (CRILC) as on September 30.

Choksi and nephew Nirav Modi were co-accused in the $2 billion scam at PNB in 2018, which involved fraudulent issuance of letters of undertakings and letters of credit favouring the firms owned by the two, from one the lender’s branch in Mumbai.

According to the Reserve Bank of India, a wilful default would be deemed to have occurred if a unit has defaulted in meeting its repayment obligations to the lender even when it has the capacity to honour the obligations or the unit has defaulted in meeting its payment obligations and diverted the funds for other purposes.

The data shows that top 33 accounts (Rs 500 crore and above) had dues totaling Rs 32,737 crore. The major defaulters include Gitanjali Gems, ABG Shipyard, REI Agro, Ruchi Soya Industries, Gili India, Winsome Diamonds and Jewellery, Kudos Chemie, Nakshatra Brands and Coastal Projects among others.

The most amount was owed to SBI; 685 wilful defaulter borrowers owed Rs 43,887 crore to the country’s largest lender, according to the data. It was followed by PNB, where 325 defaulters owed Rs 22,370 crore.

Elsewhere, 355 wilful defaulter borrowers owed Rs 14,661 crore to Bank of Baroda and 184 wilful defaulters owed Rs 11,250 crore to the Bank of India.

Bulging and alarmingly increasing bad loans by private companies is the only major problem faced by banks said AIBEA general secretary C.H. Venkatachalam. “If tough action is taken on them and money is recovered, our banks can play a bigger role in national development,” he said in a statement.

Trinamool Congress leader and Rajya Sabha MP Derek O’Brian said the government was abetting “crony capitalism” at the cost of the poor. “Rs 1,47,350 crore looted from the common man. Enough to transfer lakhs of rupees to each jobless migrant worker,” he said in a tweet.

The list of wilful defaulters was released by the AIBEA on the eve of the 51st anniversary of Bank Nationalisation that falls on July 19.

In 1969, the then government led by Indira Gandhi had nationalised 14 private banks; another six were nationalised in 1980.

In recent years, the Narendra Modi government has embarked on a move to merge several of the state-owned lenders. Effective April 1, 2020, 10 PSU banks were amalgamated into four banks. Following the consolidation, there are only 12 banks now that are state-owned.

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