As of June 30, 2016, SBI's top 100 wilful defaulters owed it more than 60 percent of its total money worth Rs.13,167 crore
With an outstanding debt of Rs.1201.40 crore, Vijay Mallya’s defunct Kingfisher Airlines heads the list of 100 ‘wilful defaulters’ who owe the country’s largest public sector bank State Bank of India (SBI) more than Rs.8,000 crore. Kingfisher’s debt comprises more than half of the Rs.2,207.07 crore that the top five in the list owe SBI with Chennai-based online education promoter Agnite Education Ltd following far behind with Rs.315.45 crore, reveal SBI documents accessed by DNA.
Others in the top five list of wilful defaulters – defined as those who are deliberately refusing to pay back bank loans – are Mumbai-based Shreem Corporation Ltd, the erstwhile Rajput Retail (Rs 283.08 crore), Chennai-based Non-Banking Finance Company, First Leasing Company of India Ltd (Rs 235.29 crore) and Teledata Marine Solutions Pvt Ltd (Rs 166.85 crore). Chandigarh’s Harman Milkfood follows in sixth position with Rs 148.16 crore.
As of June 30, 2016, the top 100 wilful defaulters owed SBI more than 60 per cent of its defaulted amount worth Rs 13,167 crore, one-third of the amount owed to the Indian banking system as a whole. This is also an increase of more than five per cent from the quarter ended March 2016.
“The names of the top 100 wilful defaulters are only the tip of the iceberg. Many big names are still shown in normal NPA (non-performing assets) through so-called restructuring schemes,” a finance ministry official said on the condition of anonymity.
An analysis of the data shows that most of the top defaulters used forgery, fudged accounts and false statements to avail huge loans from the bank. Some companies removed stocks as the primary security without the bank’s knowledge. An estimated 15 per cent of the defaulters are from the steel sector, followed by manufacturing, food, textile and jewellery.
With 27 companies owing Rs 2,033 crore, Maharashtra has more wilful defaulters than any other state. Thanks to Kingfisher, Karnataka is at number two with Rs 1,440 crore.
SBI has initiated action against defaulters by invoking the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Sarfaesi Act) as well as through cases filed with Debt Recovery Tribunals (DRTs) and assets sale to Asset Reconstruction Company (ARC).
The bank has also added 78 entities as new wilful defaulters, owing Rs 1,525 crore in the June 2016 quarter and removed 67 names owing Rs 763 crore only.
“Our organisation has been demanding the declaration of names of large defaulters, a change in laws enabling faster recoveries and making wilful default a criminal offence,” said Harvinder Singh, General Secretary of the All India Bank Officers’ Confederation. In the absence of effective action, banks are forced to manage such defaulters loan amount as write-off.
Though e-mails were sent to SBI and all the top five defaulters, only Kingfisher Airlines responded with a “No comment”. There was no response from the others.
Top 5 wilful defaulters of SBI (as on June 30, 2016)
Kingfisher Airlines Ltd (KAL)
Group-UB group
Promoters: Vijay Mallya
Activity- Air transport operation
Outstanding: Rs.1,201.40 cr
Collateral: Rs.278.65 cr
Wilful defaulters status-Declared
Agnite Education Ltd
Promoters: K Balasubramanian & K Padmnabhan
Activity- online education, and training and development services.
Outstanding: Rs.315.45 cr
Collateral: Rs.7.35 cr
Wilful defaulters status-Declared
Shreem Corporation Limited
(Erstwhile Rajput Retails Ltd)
Group-Vindhavasini Group of Companies
Promoters: Vijay Rajendra Gupta & Ajay Rajendra Gupta
Activity- Construction
Outstanding: Rs.283.08 cr
Collateral: Rs.18.15 cr
Wilful defaulters status-Declared
First Leasing Co. Of India Ltd.
Promoters: A C Muthaiah,Farouk Irani, V Selvaraj
Activity- NBFC
Outstanding: Rs.235.29 cr
Collateral: Rs.146.70 cr
Wilful defaulters status-Declared
Teledata Marine Solutions Limited
Promoters: K Balasubramanian & K Padmnabhan
Activity- Development of software products for Marine Vertices
Outstanding: Rs.166.85 cr
Collateral: Rs.8.82 cr
Wilful defaulters status-Declared
Who is a wilful defaulter?
The Reserve Bank of India (RBI) defines a wilful defaulter as this: If a “unit has defaulted in meeting its payment or repayment obligations to the lender even when it has the capacity to honour the said obligations”.
Banks have to punish wilful defaulters. No additional loan should be granted by any bank or financial institution to the listed wilful defaulters. Companies and promoters siphoning or diverting funds or indulging in fraudulent transactions should be debarred from institutional finance from scheduled commercial banks for floating new ventures for a period of five years from the date of removal of their name from the list of wilful defaulter list.
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