INDIA. Mumbai: Various companies have defaulted in loan repayment to the tune of Rs 1.08 lakh crore to different banks, who have failed to recover the debts, as per the information provided by the Reserve Bank of India (RBI), in response to an RTI query.
In response to an application filed under the Right to Information (RTI) Act 2005, the RBI in its reply dated December 09, 2020, to Pune-based RTI activist Vivek Velankar, has stated that the wilful defaulters, who together owe Rs 1.46 lakh crore to banks as of June 2020.
Velankar had filed the RTI application to get information on wilful defaulters. The information shared by RBI, as per the CRILC database, reveals that 264 wilful defaulters have failed to repay the loans. There are 23 defaulters with an outstanding of over Rs 1,000 crore and their dues accrue to Rs 43,324 crore. 34 wilful defaulters owe between Rs 500 crore to Rs 1,000 crore and their outstanding is Rs 22,105 crore. There are 207 wilful defaulters in the Rs 100 crore to Rs 500 crore default range and together they owe Rs 43,095 crore to Public Sector Banks (PSB). These defaulters cumulatively owe Rs 1,08,527 crore to different banks.
Cases against defaulters
While the concerned banks have filed cases to recover their dues from these defaulters, some of the companies have gone into liquidation. Speaking to the “Transcontinental Times”, Velankar said that, under a regulatory mandate, the central bank should suo motu publish this information on its website to create awareness among citizens and bank customers and should also make a rigorous attempt to recover this whopping amount. If the cases against wilful defaulter are decided in a fast-track court, much can be achieved.
Absconding debtors
Topping the wilful defaulters’ list is Mehul Choksi’s scam-hit company, Mumbai-based “Gitanjali Gems Ltd”, which owe Rs 5,747.05 crore, besides other group companies, “Gili India Ltd” and “Nakshatra Brands Ltd”, which had taken loans of Rs 1,446 crore and Rs 1,109.16 crore, respectively. Choksi, an Indian-born fugitive businessman, at present residing in Antigua and Barbuda, is wanted by the Indian judicial authorities for criminal conspiracy, criminal breach of trust, cheating, and dishonesty including the delivery of property, corruption, and money laundering.
Choksi’s nephew Nirav Modi, founder of Firestar Diamond International, although technically not a debtor, is accused of defrauding the Punjab National Bank by obtaining the fraudulent letter of undertaking worth Rs 10,000 crore in connivance with some of the employees of the PNB. He got his first fraudulent guarantee from PNB on March 10, 2011, and managed to get 1,212 more such guarantees over the next 74 months. At present, he is facing an extradition trial in the UK.
The second on the list of defaulters is “REI Agro Ltd”, New Delhi, with an amount of Rs 3,516 crore, and its directors Sandip Jhujhunwala and Sanjay Jhunjhunwala are already under the scanner of the Enforcement Directorate (ED). The REI Agro, a firm that claims to have a 22 percent share in the world’s basmati rice market, has already gone in for liquidation after the National Company Law Tribunal (NCLT) ordered it to do so.
The next on the list is Frost International Ltd, Kolkata, with an outstanding of Rs 3,097.64 crore. It is followed by the absconding diamantaire Jatin Mehta’s “Winsome Diamonds & Jewellery”, Surat, Gujarat, owing Rs 2,975.73 crore. The firm is being probed by the Central Bureau of Investigation (CBI) for various bank frauds.
While “Zoom Developers Pvt Ltd”, Indore, Madhya Pradesh, is yet to clear an outstanding debt of -Rs 2580.61crore. Kanpur-based writing instruments giant, “Rotomac Global Pvt Ltd”, part of the famed Kothari group, is next on the list with an outstanding of Rs 2,530.95 crore.
The others among the top-10 wilful defaulters include, “Kudos Chemie”, Punjab (Rs 1,948.12 crore), ABG Shipyard Ltd, Bharuch, Gujarat (Rs 1,874.90 crore), Transstroy (India) Ltd, Hyderabad, (Rs 1,861.11 crore), and Forever Precious Jewellery and Diamonds Private Ltd, Ahmedabad, Gujarat (Rs 1,653.25 crore). Vijay Mallya’s Mumbai-based Kingfisher Airlines Ltd (KAL) is in 15th place on the list with dues of Rs 1,335.26 crore. Atlas Sales Corporation, Jalandhar, Punjab, is the last on the list with Rs..54 lakh outstanding debt.
Names of the banks not revealed
However, the Information provided by RBI to Velankar does not reveal the names of the banks who had advanced these loans. But the data shared by the All India Bank Employees Association (AIBEA) in July this year shows that among the 17 public sector lenders, SBI has the highest number of wilful defaulters at 685, who together have defaulted on loans of Rs 43,887 crore. It is followed by PNB, which has 325 wilful defaulters with an outstanding of Rs 22,370 crore. The UBI has written off Rs 26,027 crore as bad loans in past years.
As per the list released by AIBEA, the Mehul Choksi-owned Gitanjali Gems Ltd, Gili India Ltd, Nakshatra Brands Ltd, and Kudos Chemie Ltd, Punjab, owe money to PNB, the ABG Shipyard Ltd and Ruchi Soya Industries Ltd to SBI, REI Agro Ltd to UCO Bank, Winsome Diamonds & Jewellery Ltd to Central Bank of India and Coastal Projects Ltd owe money to SBI.
Other wilful defaulters include Concast Steel and Power Limited, Kolkata, (Rs 1585.73 crore), Surya Vinayak Industries Ltd, New Delhi (Rs 1527.68 crore), Era Infra Engineering Ltd, New Delhi (Rs 1476.62 crore), and Indian Technomac Co Ltd, Himachal Pradesh (Rs 724.12 crore).
India’s Public sector banks having so many defaulters appears fictional! But a thorough research by established senior journalist pointing out names with a ‘defaulter’s list’ makes one wonder how such crimes go unnoticed in a large democracy. More surprising is the fact that these have come to light now. The article is enlightening yet alarming at the magnitude of these offences.