The minister was replying to a question whether the cases of wilful defaulters of banks have increased during the last five years.
The number of wilful defaulters in nationalised banks has increased by over 60 per cent to 8,582 in five years to March 2019, the government said Monday. By the end of 2014-15 fiscal, the figure stood at 5,349, Finance Minister Nirmala Sitharaman said in a written reply in Lok Sabha. A wilful defaulter is an entity or a person that has not paid the loan back despite the ability to repay it.
The minister was replying to a question whether the cases of wilful defaulters of banks have increased during the last five years. Rising consistently since 2014-15, the number of such borrowers increased to 6,575 in 2015-16; 7,079 in 2016-17 and further to 7,535 in 2017-18.
“Wilful defaulters are acted against comprehensively. Moreover…as per RBI’s instructions, wilful defaulters are not sanctioned any additional facilities by banks or financial institutions, and their unit is debarred from floating new ventures for five years,” Sitharaman said. Recovery of Rs 7,654 crore has been done from wilful defaulters’ accounts during the last five financial years, she said.
As per data reported by nationalised banks, till March 31, 2019, suits for recovery have been filed in 8,121 cases. In cases involving secured assets, action under the provisions of SARFAESI Act has been initiated in 6,251 cases. There are 17 nationalised banks in India.
“Further, in accordance with RBI instructions of initiation of criminal proceedings wherever necessary, FIRs have been registered in 2,915 cases,” Sitharaman said. Besides, vide Sebi regulations, wilful defaulters and companies with wilful defaulters as promoters/directors have been debarred from accessing capital markets to raise funds, she said. In addition, the Insolvency and Bankruptcy Code, 2016 has debarred wilful defaulters from participating in the insolvency resolution process.
For effective action against wilful defaulters fleeing Indian jurisdiction, the Fugitive Economic Offenders Act, 2018 has been enacted to provide for attachment and confiscation of property of fugitive offenders and has disentitled them from defending any civil claim.
The government has also advised public sector banks to decide on publishing photographs of wilful defaulters as well as to obtain certified copy of the passport of promoters/directors and other authorised signatories of companies availing loans of more than Rs 50 crore, the minister said. Heads of PSBs have also been empowered to request for issuance of look out circulars against wilful defaulters, she said.