The amount owed by wilful defaulters to Indian banks has risen more than ten-fold over the past decade, from Rs 23,000 crore on March 31, 2012, to Rs 2.4 lakh crore on May 31, 2022.
For the uninitiated, the RBI defines willful defaulters as people who had the capacity to repay their loans but chose not to. Companies that use funds for purposes other than what the loans were originally granted for are willful defaulters as well.
Data from credit bureau TransUnion Cibil shows that the defaults had surged to nearly Rs 2.6 lakh crore in March 2021, but have come down a bit since then. The data pertains only to those accounts in which suits have been filed against willful defaulters with outstanding amounts of Rs 25 lakh or more. As of May 31st 2022, there were more than 12,000 such defaults in India, as per TOI.
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This massive amount of Rs 2.4 lakh crore is 2.7 times the allocation of Rs 86,200 crore to the health ministry and nearly twice as much as the Rs 1.4 lakh crore allocated to the rural development ministry that funds the rural jobs scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
The report mentioned that this Rs 2.4 lakh crore translates into $29.7 billion, which is higher than the GDP of 87 countries.
Vijay Mallya & Nirav Modi Not The Top Defaulters
According to the report, Vijay Mallya and Nirav Modi did not make it to the list of the top wilful defaulters in India. These include many tax haven countries which typically have small GDPs.
As per the RBI data mentioning the consolidated amounts owed by people or companies who had at least one account in which they defaulted for Rs 100 crore or more, the ABG Group promoted by Rishi Agarwal and others tops the list. The company's seven loan accounts in different banks add up to Rs 6,382 crore of willful defaults.
Amtek Auto and its subsidiaries, promoted by Arvind Dham, are second with willful defaults of Rs 5,885 crore. Brothers Nitin and Chetan Sandesara, who have been on the run for a few years now, are third on the list with the consolidated default of their company, Sterling Global Oil Resources and its subsidiaries amounting to Rs 3,757 crore.
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The companies of Kapil and Dheeraj Wadhawan Dewan Housing Finance (DHFL) and its subsidiaries- have willfully defaulted on Rs 2,780 crore. Next on the list are yet another set of brothers - Sanjay and Sandeep Jhunjhunwala, whose company Rei Agro has defaulted on Rs 2,602 crore of bank loans.
Other companies that defaulted on more than Rs 2,000 crore of bank loans are Mehul Choksi's Gitanjali Gems, Sanjay Kumar Sureka's Concast Steel and Power, Atul Punj's Punj Lloyd and Jatin Mehta's Winsome Diamonds and subsidiaries. Choksi and Mehta have fled to the Caribbean islands. Overall, nine companies have defaulted on more than Rs 2,000 crore of loans. Defaults are between Rs 1,500 crore and Rs 2,000 crore for the next seven in the list, as per TOI. The famous among those are Shakti Bhog Foods, Sintex Industries, Rotomac Global, Deccan Chronicle Holdings and S Kumars Nationwide.
SBI & Maharashtra Top The List
95% of the defaults were reportedly recorded in the books of public sector banks (PSBs). And out of this, the State Bank of India (SBI) and its associates account for over 30% of such loans.
After SBI, its Punjab National Bank (PNB), Union Bank of India (UBI) and Bank of Baroda (BoB), each of which reportedly have over 10% share in the outstanding amount.
In terms of states, the state which has the highest gross state domestic product (GSDP), Maharashtra, accounted for 34% of all the loan defaults in the country. Delhi recorded the second highest loan defaults, accounting for 17.5% of the total. West Bengal stood at the third spot, with 8.8 per cent of the total wilful defaults.
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