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Wilful defaulters owe Rs. 66k cr to govt banks

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Rs. 1.73 lakh crore of public sector bank money stuck in top 100 non- performing accounts as of Dec 2015
There were 7,686 wilful defaulters owing ? 66,190 crore to stateowned banks as of December 2015, Jayant Sinha, minister of state for finance, told Rajya Sabha on Tuesday. Sinha also said that the total outstanding amount in top 100 nonperforming accounts ( NPAs) with public sector banks ( PSBs) was Rs. 1.73 lakh crore as of December 2015.
Sinha said the number of wilful defaulters of PSBs rose from 5,554 to 7,686 in three years to December 2015 while the amount involved more than doubled to Rs. 66,190 crore from Rs. 27,749 crore. “ The total exposure of top 50 defaulters of PSBs as of December 2015 was Rs.1,21,832 crore,” he said in a written reply in the Upper House.
In another reply, Sinha said there were 1,365 borrower accounts having outstanding of Rs. 500 crore and more at the end of December 2015. He said government has taken specific measures to address issues in sectors such as infrastructure, steel and textiles, where instances of NPAs are high.
Vibha Batra, head of financial sector ratings at ICRA said while such information is useful, such disclosures should happen frequently more for meaningful analysis and action. “ This information would help to identify banks where instances and amounts involved in wilful default are high for further probe. There could be more questioning about credit underwriting practices adopted by banks,” Batra said. Senior public sector bank executives said the issues were already in focus due to cases in the Supreme Court, including that of Vijay Mallya and Kingfisher Airlines. Hence, there was already public pressure to step up action for recovery. Richa Roy, senior corporate lawyer with AZB & Partners said disclosing number may be a statistical exercise but it highlights deep systemic risk. “ It is public money ( deposits) and further strengthens need for having Bankruptcy Code and courts soon in place to deal with defaulters effectively,” she said.
The Immediate benefit is limited as cases are mired in delays at various legal forums including Debt Recovery Tribunal and courts. In most cases, banks are saddled with bad loans because of economic downturn. But laxity in credit risk appraisal, loan monitoring and lack of appraising skills for projects have also landed lenders in problem.
Business Standard New Delhi,4th April 2016

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