Banking

Wilful Defaults Surge Past Rs 1 Lakh Crore

Over the last five years, wilful defaults have risen by over Rs 84,000 crore, according to data put out by credit rating agencies.

SBI's headquarters in Mumbai. Credit: Reuters

SBI’s headquarters in Mumbai. Credit: Reuters

New Delhi: Wilful defaults by Indian borrowers – where a borrower has the capacity to repay the loan but has still missed repayment obligations – have touched Rs 1,09,594 crore as of March 2017.

According to a report in the Indian Express, which cites data from credit information agency TransUnion CIBIL, wilful defaults rose from Rs 74,694 crore in March 2016 to nearly Rs 1.1 lakh crore a year later.

Over the last five years, wilful defaults have risen by over Rs 84,000 crore – in March 2013, one year before the Modi government, it sat at Rs 25,410 crore.

“State Bank of India topped the list of banks with wilful defaulters with Rs 15,069 crore stuck in 997 accounts of borrowers, recording a rise of Rs 2,759 crore in fiscal 2017. Punjab National Bank was second with wilful defaults of Rs 10,989 crore in 871 accounts. Bank of Baroda’s wilful defaults soared from Rs 1,367 crore in the year ended March 2016 to Rs 4,785 crore by March 2017,” the report notes.

The Reserve Bank of India defines a “wilful default”, a more severe category assigned to borrowers in three different ways. One, if a unit has defaulted in meeting repayment obligations to the bank when it has the capacity to honour its commitments. Two, when a borrower has either siphoned off or not utilised funds for the specific purposes under which the amount was borrowed. And three, those companies that have either disposes or removed of assets that were given for the purpose of securing a term loan.

According to the report, SBI’s wilful default accounts “include GET Engineering (Rs 424 crore) Zenith Birla (Rs 139 crore) and Rajput Retail (Rs 283 crore), among others”.

“Bank of Baroda has classified Sidhivinayak Logistics for Rs 281 crore in defaults and ABC Cotspin for Rs 362 crore. PNB has filed suits against Zoom Developers, for Rs 410 crore in defaults, Forever Precious (Rs 747 crore) and Winsom Diamond (Rs 899 crore),” the report notes.