Wilful defaulters in the country have decreased by 56 per cent in the last 8 years, from 2,469 cases of wilful default in 2014-15 to 1,063 in 2020-21, the Ministry of Finance informed the parliament.
The government was responding to an unstarred question raised by Member of Parliament Santanu Sen in the Rajya Sabha.
During 2019-2020, there were 597 cases of detected wilful default, which doubled to 1,063 in 2020-21, government data shows.
A wilful default happens when the borrowing unit has defaulted even when having the repaying capacity, or diverted funds for purposes other than those specified while availing of financing, or siphoned off funds, disposed off secured assets without the bank’s knowledge.
Aggregate gross advances of scheduled commercial banks increased from Rs 25,03,431 crore in 2008 to Rs 68,75,748 crore in 2014, Ministry said citing data from the Reserve Bank of India (RBI).
“Aggressive lending practices along with wilful default were the primary reason for the spurt in the stressed assets,” the government reply stated. The government said that an Asset Quality Review (AQR) initiated in 2005 on fully provisioned bank balance sheets revealed high incidents of non-performing assets (NPAs), leading to an increase in the identification of cases of wilful default.
The government in its reply stated that the number of wilful defaulters increased by 49 per cent between 2014 and 2015. This percentage increase reduced to 8.5 per cent during the years 2020 and 2021.
However, RBI is not aware of the amount recovered by the banks from the wilful defaulters as it does not maintain data on the same. But both public and private sector banks recovered an aggregate amount of Rs 6,15,146 crore and Rs 1,86,135 crore respectively in non-performing assets and written off loan accounts of wilful defaulters from 2014 to 2021.
The highest outstanding amount owed by wilful defaulters is to State Bank of India, worth Rs 67,304 crore, followed by Punjab National Bank (Rs 37,662 crore).
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