Wilful defaulters: IDBI Bank owed Rs 5,372 crore
More than 120 wilful defaulters owe public sector lender IDBI Bank Rs 5,372 crore as on May 16, 2018. Of this, the top 10 have unpaid loans of Rs 3,717 crore or around 70% of the amount. In December 2017, such entities numbered 85 and owed the lender Rs 4,154 crore. According to data from the bank, the biggest such default is by S Kumars Nationwide which owes the bank Rs 834 crore. This is followed by Kingfisher Airlines (RS 696 crore), Ruchi Soya Industries (Rs 465 crore), Gupta Coal India (Rs 451 crore), Deccan Chronicle Holdings (Rs269 crore) and Reid & Taylor (India) Rs 260 crore), among others.
Excepting in the case of Kingfisher Airlines, lenders are in the process of recovering their dues from these borrowers via the Insolvency and Bankruptcy Code. According to Reserve Bank of India (RBI) guidelines, a borrower is termed a wilful defaulter if he has defaulted in meeting the repayment obligations to the lender even when he has the capacity to repay, or has not utilised the money from the lender for the specific purposes for which finance was availed and has diverted the funds for other purposes.
Data from TransUnion Cibil showed that at the end of FY18, total wilful defaults stood at Rs 1.26 lakh crore. Meanwhile, another public sector sector bank, Punjab National Bank, recently said wilful defaulters owed the bank Rs 15,354 crore as on June 30.
IDBI Bank is in the middle of a takeover bid by Life Insurance Corporation after the Insurance Regulatory and Development Authority of India allowed it to raise its stake in IDBI Bank up to 51% from the current 10.82%. Owing to its worsening asset quality, the RBI initiated a prompt action for the bank, restricting its lending to only low risk-weighted assets. In the March quarter of 2017-18, IDBI Bank reported a net loss of Rs 5,662.76 crore, wider than the Rs 3,199.8 crore loss reported in the same period last year, owing to an 80% year-on-year jump in provisions.