SBI tops list of wilful default, PNB next
What's the story
India's largest lender SBI is shouldering 27% of the total amount that wilful defaulters owe to the public-sector banks. According to reports, State Bank of India, as on March 31, has Rs. 25,104 crore outstanding from 1,762 wilful defaulters. Punjab National Bank, which has Rs. 12,278 crore due from 1,120 wilful defaulters, is second in the list. Here's more.
PSBs
Bad loans are crippling PSBs
As per Finance Ministry data, the total amount of bad loans that are due to the PSBs by wilful defaulters stands at Rs. 92,376 crore at the end of FY2016-17. The amount rose by 20.4% from Rs. 76,685 crore that was noticed at the end of FY2015-16. Cumulatively, PNB and SBI account for Rs. 37,382 crore or 40% of the total outstanding loan amount.
Defaulters
The wilful defaulters' list is rising
Annually, 10% rise in the number of wilful defaulters has been noticed. In the previous financial year, the total number of wilful defaulters stood at 8,167 and this number at the end of March, this year, stands at 8,915. First Information Report or FIR has been filed by the banks against 1,914 of these cases that account for bad loans of Rs. 32,484 crore.
NPAs
Wilful default is not devoid of responsibility
Gross NPAs of PSBs rose from Rs. 5.02 lakh crore, noticed a year ago, to Rs. 6.41 lakh crore at the end of March 2017. To keep a check on rampant wilful defaults, RBI has now imposed stricter guidelines. The PSB has also made it clear that the promoter of a defaulting firm, even if not a full-time director, can't escape from responsibilities.
RBI
Pay or face the consequences
RBI believes a wilful default takes place when a borrower, despite having the capacity to pay the borrowed amount, chooses not to honor its obligations or siphons off funds by selling its assets without notifying the bank. To condone this act, the apex bank of India has now allowed PSBs to publish photographs of defaulters so that others get to know what they've done.