During the past five financial years, scheduled commercial banks (SCBs) wrote off bad debts worth Rs10.09 lakh crore. As per data provided by the Reserve Bank of India (RBI), public sector banks (PSBs) have recovered Rs4.80 lakh crore, including recovery of Rs1.03 lakh crore from written-off loans during the same period, the Lok Sabha was informed. Further, information shared by the ministry of finance shows that Gitanjali Gems Ltd, owned by fugitive businessman Mehul Choksi, remains the top wilful defaulter with an outstanding of Rs7,848 crore as of 31 March 2022.
In a written reply Dr Bhagwat Karad, minister of state for finance, says, "In the last five financial years, the PSBs have made an aggregate recovery of Rs4,80,111 crore from non-performing asset (NPA) accounts and upgradation of NPAs of Rs1,45,356 crore. Further, slippages into NPAs have reduced from Rs3,38,710 crore for FY16-17 to Rs1,44,315 crore for FY21-22, all of which has resulted in decline of NPAs."
"The decline in NPAs can also be due to write-off, which is primarily an exercise undertaken for cleaning of balance-sheet, avail of tax benefit and optimise capital by PSBs, as per RBI guidelines and banks' board approved policies," he added.
Members of Parliament (MPs) Ravneet Singh Bittu and Pradyut Bordoloi have asked whether NPAs of the PSBs have been reduced primarily due to the writing off of loans from the account books of these PSBs. They also asked for details of top-50 loan write-offs and names of top-50 wilful defaulters over the past five years.
Dr Karad says, "With regard to the details of the top 50 loans that were written off, RBI has informed that account-wise information on written-off loan accounts is not maintained by it. Further, under the provisions of section 45E of the RBI Act, RBI is prohibited from disclosing borrower-wise credit information since the credit information submitted by a bank is treated as confidential and is not to be published or otherwise disclosed. However, scheduled commercial banks and all Indian financial institutions report certain credit information of all borrowers having aggregate credit exposure of Rs5 crore and above to RBI, under its Central Repository of Information on Large Credits (CRILC) database."
Topping the list is Mr Choksi's scam-hit company, Gitanjali Gems, which owed Rs7,848 crore, besides other group companies, Gili India Ltd and Nakshatra Brands Ltd, which had taken loans of Rs1,447 crore and Rs1,149 crore, respectively.
Currently, Mr Choksi is proclaimed an offender by the Indian government and several cases against him, by agencies like CBI (central bureau of investigation), enforcement directorate (ED) and the income-tax (I-T) department, are pending. Last month, Securities and Exchange Board of India (SEBI) banned him from trading in the markets for 10 years for using front entities to trade in the shares of the company to maintain its price from falling. Mr Choksi has also been fined Rs5 crore for the same SEBI rule violations that restrict promoters of a company from trading in the shares or derivatives contracts of the same company. Mr Choksi had been defrauded and, in January 2018, fled the country.
The second wilful defaulter on the list is Era Infra Engineering Ltd, which owes Rs5,879 crore to Indian lenders.
REI Agro Ltd, with an amount of Rs4,803 crore, is the third defaulter on the list. Its directors, Sandip Jhujhunwala and Sanjay Jhunjhunwala, have already been under the scanner of the ED and CBI for the past few years.
The next three on the list are Concast Steel and Power Ltd (Rs4,596 crore), ABG Shipyard Ltd (Rs3,708 crore) and Frost International Ltd (Rs3,311 crore).
Kanpur-based writing instruments giant Rotomac Global Pvt Ltd, part of the famed Kothari group, which owed Rs2,893 crore, is the next wilful defaulter.
Coastal Projects Ltd, with an outstanding of Rs2,311 crore and Gwalior-based Zoom Developers Pvt Ltd, with Rs2,147 crore, are also among the top 10 wilful defaulters, information shared by the government in the Lok Sabha shows.
According to data obtained under Right to Information (RTI) and analysis done by Pune-based Vivek Velankar, just 312 big defaulters owe more than 76% or Rs1,41,583.50 crore of the total bad loans. As of 31 December 2021, nearly 2,237 wilful defaulters have an outstanding of Rs1,84,863.32 crore. While RBI had shared a list of names of 2,278 wilful defaulters, there are 41 borrowers against whom there is zero outstanding.
Information provided by RBI shows that there are 26 big defaulters who have outstanding loans of Rs1,000 crore and above. These wilful defaulter groups, together, owe Rs60,425.71 crore to PSBs.
The next group on the list is wilful defaulters with an outstanding of Rs500 crore to Rs1,000 crore. There are 40 companies on this list with bad debts worth Rs28,297.99 crore.
There are 246 wilful defaulters who have an outstanding between Rs100 crore to Rs500 crore. This group of defaulters owes Rs52,859.80 crore to PSBs.
The highest number of wilful defaulters have an outstanding between Rs1 crore and Rs100 crore. This list has 1,914 companies who, together, have bad debt of Rs43,273.86 crore.