India's biggest 2,426 wilful defaulters owe the banks an astounding Rs 1.47 lakh crore. The top 33 of these, who owe Rs 500 crore or more, have defaults adding up to Rs 32,737 crore. Economic fugitives Mehul Choksi's Gitanjali Gems and Jatin Mehta's Winsome Diamonds are among the top 10 defaulters which also includes ABG Shipyards, Rei Agro and Ruchi Soya, according to a list released by bank staff body All India Bank Employees' Association (AIBEA) to mark the 51st anniversary of bank nationalisation.
Mehul Choksi's Gitanjali Gems has the biggest single loan default of Rs 4,644 crore to Punjab National Bank, part of a bank fraud that shook the Indian banking sector in 2018. Jatin Mehta's Winsome Diamonds and Jewellery owes Rs 1,390 crore to Central Bank of India, Rs 984 crore to Punjab National Bank, and Rs 636 crore to Canara Bank. ABG Shipyard owes Rs 1,875 crore to SBI, Ruchi Soya Industries owes Rs 1,618 crore to SBI, and Kingfisher Airlines owes Rs 586 crore to SBI.
The top 10 loan accounts of wilful defaulters alone have defaults to the tune of Rs 17,005 crore between them. The next 10 defaulter accounts are responsible for defaults worth Rs 7,768 crore, while the next 13 accounts have burdened banks with loan defaults worth Rs 7,964 crore.
In a statement on Saturday, AIBEA General Secretary CH Venkatachalam said that Indian banks are currently struggling with ever-increasing bad loans, which need to be addressed for them to play a bigger role in national development. Banks need to be strengthened to cater to the doctrine of Atmanirbhar Bharat.
"Atma nirbhar or self-dependency cannot be achieved by weakening our public sector banks or by privatizing our Banks. We have very Vitter experience of private Banks in our country," said Venkatachalam. "The only major problem faced by our banks is the bulging and alarmingly increasing bad loans by the private companies and corporates. If tough action is taken on them and money is recovered, our banks can play a bigger role in national development."
Venkatachalam further added that practice of giving concessions to defaulters and burdening the banking customers with lesser rate of interest on their savings and increase in service charges should be stopped.
In the statement, AIBEA demanded adequate capital to all banks, end to bank privatisation, stringent measures to recover corporate bad loans, make wilful loans defaults a criminal offence, publish names of all loan defaulters and stop them from holding public office and contesting elections. The bank staff body also asked for review of Insolvency and Bankruptcy Code to strengthen recovery laws.
The AIBEA called for increase interest rate on deposits, reduction in banking service charges for common people, and merging all RRBs with sponsor Banks. The organisation said that it will undertake national campaign on these demands.