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7,035 willful defaulters owe 22 percent of total NPA of PSU banks

By:  Ekta (Source:BS) , Place:  New Delhi ,  Update:19 Oct 2015

Out of Rs.2.67 lac crore Gross NPA of Public Sector Banks as many as 7,035 willful defaulters owe about Rs 59,000 crore that is 22 percent of Gross NPA of PSU Banks. It is revealed from banks reports.

Out of Rs.2.67 lac crore Gross NPA of Public Sector Banks as many as 7,035 willful defaulters owe about Rs 59,000 crore that is 22 percent of Gross NPA of PSU Banks. It is revealed from banks reports.

 

According to RBI, a willful default occurs when a defaulting borrower doesn't honour an obligation, despite having the capacity to pay, or siphoning off funds and disposing of assets without the knowledge of the bank.


State Bank of India (SBI) and its five associate banks had 1,628 willful defaulters owing Rs 16,834 crore to them, as of March 31, 2015.

Central Bank of India had 722 willful defaulters, followed by Union Bank of India (643) and Canara Bank (612 such borrowers).

In absolute terms, 
Punjab National Bank leads the pack of nationalised banks with 410 such accounts having outstanding loan of Rs 7,282.25 crore.

PNB is followed by Central Bank of India with outstanding loan of Rs 4,428.62 crore. Oriental Bank of Commerce had 382 such accounts with non-performing assets of Rs 3,877.44 crore at the end of last financial year.

As far as UCO Bank is concerned, it had 594 such accounts with outstanding amount of Rs 3,677.08 crore.

In 75 per cent of such cases, a 
finance ministry official said, banks have initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi) Act.

Willful defaulters constitute about 22 per cent of the gross non-performing assets (NPAs) of state-owned banks.

Gross NPAs of the public sector banks rose to Rs 2.67 lakh crore at the end of March 2015 as against Rs 2.40 lakh crore a year ago.

In order to check incidences of willful default, RBI has tightened the norms and made it clear that promoter of the defaulting company cannot escape from his responsibility even if he is not a whole time director.

As per earlier guidelines, a bank couldn't label a non-whole-time director of a company as a 
willful defaulter unless there was conclusive evidence that the individual was aware of the willful default by the company and had not objected to it.

Recently, the govt has focused on appointing of CMDs and CEOs of PSU banks to appoint such person who have minimum 3 to 5 year residual service and adequate experience of managing these complicated things with positive result.

The bank defaulters are going to be handled very shortly such in way that they have to pay the bank dues otherwise they cannot run another business also.

 
 
 
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