Four years after the Supreme Court first directed the Reserve Bank of India (RBI) to disclose a list of India’s wilful defaulters, the central bank has finally complied.
In response to a Right to Information (RTI) application filed by The Wire in May 2019, the RBI has released a list of 30 major wilful defaulters.
For over ten years, the RBI has denied RTI applicants this information arguing that it would be against the economic interests of the country and its ‘fiduciary relationship’ with the banks disallows it from doing so.
While the Central bank has been reluctant to release this data, individual banks and lenders have always generated information on wilful defaulters in the form of suits filed for recovery of their dues. This data has, over the years, been collated by TransUnion Cibil.
According to the Central bank’s response though, three companies belonging to fugitive diamantaire Mehul Choksi are amongst the 30 major wilful defaulters that the Indian banking system is currently grappling with.
Total funded advances outstanding to these 30 companies – along with the amount the banks have written off so far – adds up to over Rs 50,000 crore.
To put this in perspective, as of December 2018, over 11,000 companies had willfully defaulted on amounts worth over Rs 1.61 lakh crore, according to TransUnion Cibil data.
The wilful defaulter data released by the RBI comes from a large centralised banking system database called ‘CRILC’ – the Central Repository of Information on Large Credits. This is a pool of data on the credit information of all borrowers who have an exposure of Rs 5 crore and above. CRILC has in the last three years been particularly useful as a data-sharing mechanism between banks as well, to identify errant borrowers and ensure they don’t try to cheat the system.
From February 2019, banks have had the option in CRILC to categorise whether a borrower is a wilful defaulter or not.
The RBI defines a borrower as a ‘wilful defaulter’ if the company has not met repayment obligations despite having the capacity to do so. While a ‘wilful default’ tag does not necessarily imply wrong-doing on the part of the promoters, the classification is also used while referring to loan fraud cases, where the borrower has diverted the loan for purposes other than those initially stated.
The table below, therefore, is a list of borrowers flagged as ‘wilful defaulters’ by banks. The amounts of money given in the table is the sum of ‘funded advances outstanding’ and amount ‘prudentially/technical written-off’ as on April 30, 2019.
The data does not contain total bad loans or non-performing assets of these wilful defaulter accounts.
Borrowers flagged as wilful default and reported by banks under CRILC reporting as on April 30 2019.
Name and Amount (Rs. in Cr)
Zoom Developers Private Limited 2024
Winsome Diamonds and Jewellery Limited 3386
VMC Systems limited 1314
Surya Vinayak Industries Limited 1628
Surya Pharmaceutical Limited 1065
Siddhi Vinayak Logistic Limited 1349
Shree Ganesh Jewellery House Limited 1085
S Kumars Nationwide limited 1581
Ruchi Soya Industries Limited 3225
Rotomac Global Private Limited 2844
Rei Agro limited 4197
Nakshatra Brands Limited 1148
Nakoda limited 1028
Kudos Chemie limited 2326
KS Oils limited 1026
Kingfisher Airlines Limited 2488
Jain Infraprojects Limited 1076
Indian Technomac Company Limited 1091
Hanung Toys and Textiles Limited 949
Gupta Coal India Private Limited 1235
Gitanjali Gems Limited 5044
Gili India Limited 1447
Forever Precious Jewellery and Diamonds Private Limited 1718
First Leasing Co of India Limited 929
Diamond Power Infrastructure 869
Deccan Chronicle Holdings Limited 1951
Concast Steel and Power Limited 888
Coastal projects limited 984
Action Ispat and Power Private Limited 888
ABG Shipyard Limited 1875
Many of the names on the list are well known – Gitanjali Gems, Rotomac Global, Zoom Developers, Deccan Chronicle Holdings, Winsome Diamonds, REI Agro, Siddhi Vinayak Logistics and Kudos Chemie. All these companies, or their promoters, have been slapped with cases by either the Central Bureau of Investigation or the Enforcement Directorate over the past five years.
Some of these firms also allegedly appeared on the list that former RBI governor Raghuram Rajan gave to the Prime Minister’s Office. This list was given as part of an appeal by Rajan for quicker action to be taken by India’s probe agencies.
While very few of these investigations have reached their logical conclusion yet, the agencies have filed chargesheets for some and attached assets as part of the loan recovery process in others. #casansaar (Source - PTI, Wire, Business Standard)
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