Wilful defaults in India cross Rs 1.5 lakh crore in 2018-19: FM Nirmala Sitharaman
Reuters July 2, 2019
India's state-owned banks had classified Rs 1.5 lakh crore ($21.76 billion) worth of loans as "wilful defaults" in 2018-19, with the biggest lender State Bank of India accounting for nearly a third, the finance minister said in the parliament.
Under Indian law, wilful defaulters are classified as firms or individuals who own large businesses and deliberately avoid repayments.
The State Bank of India saw the highest number of wilful defaults at 461.58 billion rupees, while Punjab National Bank stood second at 250.9 billion rupees, with Bank of India at 98.9 billion rupees, Finance Minister Nirmala Sitharaman said in a written reply to queries in the parliament on Tuesday.
According to data from the Reserve Bank of India (RBI), gross loans and advances in state-run banks came in at 638.2 billion rupees, as of March 31, 2019.
The Narendra Modi-led government has been tightening norms against wilful defaulters especially after Indian aviation tycoon Vijay Mallya, fugitive billionaire jeweller Nirav Modi and his uncle Mehul Choksi fled the country following repayment defaults.
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 the insolvency resolution process.
Bank chiefs can also authorise look-out notices for defaulters to prevent them from leaving the country.