New Delhi: Banks have reported over 16,000 wilful defaulters with a cumulative debt of Rs 3.46 lakh crore as of December 2022, said the Indian Express, citing data. Some of them may be eligible for write-offs, the report added.Wilful defaulters are borrowers who refuse to repay loans despite having the capacity to make payments. As per the Reserve Bank of India’s (RBI) classification, a ‘wilful default’ is deemed to have occurred if the borrower has defaulted in meeting their repayment obligations to the lender even when they have the capacity to honour the obligations.With the central bank’s move to make wilful defaulters eligible for compromise settlements, some of these 16,000 defaulters can now approach lenders to write-off their debts, the report said.The ‘wilful defaulters’ can also apply for fresh loans after 12 months of executing a compromise settlement.Note that the money stuck in the wilful default category has increased by 41%, or over Rs 1 lakh crore, in the last two years from Rs 2.45 lakh crore in December 2020, the newspaper reported, citing data compiled by Transunion Cibil, a credit information company registered with the RBI.Under a compromise settlement, the lender may agree to accept a reduced amount of the outstanding debt, waive a portion of the interest or penalties, extend the repayment period, or offer other suitable terms based on the borrower’s financial situation and ability to repay. On June 7, 2019, the RBI, in its ‘Prudential Framework for Resolution of Stressed Assets’, had said that the borrowers who committed frauds/ malfeasance/ wilful default would remain ineligible for restructuring. However, the central bank’s recent move to support wilful defaulters through a compromise settlement or technical write-off has raised concerns over the banking sector’s long-term stability.In a joint statement, bank unions said that the move not only rewards unscrupulous borrowers but also sends a distressing message to honest borrowers who strive to meet their financial obligations.Also read: Why Is the RBI Supporting Wilful Defaulters at the Cost of Middle Class Depositors?Public sector banks account for 85% of the wilful defaults at Rs 2.92 lakh crore, the daily reported.Among public sector banks, the State Bank of India has the highest number of wilful default accounts. It has 1,881 wilful default accounts for Rs 79,227 crore as of December 2022, the newspaper reported.It is followed by the Punjab National Bank which has 2,143 wilful default accounts for Rs 38,333 crore. The Union Bank of India has Rs 35,561 crore (1,747 accounts), IDBI Bank Rs 23,601 crore (335 accounts) and Bank of Baroda Rs 23,879 crore (2,203 accounts), the report said, citing data from the Cibil website,.Among the private banks, Axis Bank has 607 wilful default accounts for Rs 2,005.9 crore, ICICI Bank 59 accounts for Rs 2,136.5 crore and HDFC Bank 49 accounts for Rs 505.5 crore.
