BoB declares 200 borrowers as wilful defaulters

The government-owned Bank of Baroda (BoB) has issued a list of 200 entities it has declared ‘wilful defaulters’, with dues totalling Rs 2,212 crore.

Among these are Surya Vinayak and Sai InfoSystem. This list is for the period up to September 2016. Legal action for recovery remains a priority, said executives. 

Punjab National Bank (PNB), also government-owned, had earlier put out its list of wilful defaulters. According to the Reserve Bank of India (RBI), wilful default is deemed to have occurred when a borrower has not repaid despite capacity to do so. Also, there could be an element of diversion of funds for other purposes.

PNB’s list had 934 entities, owing a combined Rs 11,000-odd crore, as of June 2016. Among these are defunct Kingfisher Airlines and its guarantors, United Breweries Holdings and United Spirits Chairman Vijay Mallya. Kingfisher owes Rs 1,500 crore to PNB.

The number of willful defaulters at public sector banks (PSBs) as on December 31, 2012, was 5,554, amounting to Rs 27,749 crore of dues. As on December 31, 2015, this had risen to 7,686 entities, amounting to Rs 66,190 crore. The total exposure of the top 50 defaulters of the PSBs as of December 2015 was Rs 121,832 crore.

PSBs, saddled with a huge pool of bad loans, have begun steps to recover dues. Raghuram Rajan, governor at RBI till early September 2016, had made recoveries from defaulters a priority during his tenure. In July 2015, RBI had issued guidelines on tackling such defaulters. Actions to be taken include restricting any additional facilities from financial institutions, criminal action, removal of directors of such companies from boards and changes in management.

Parliament’s standing committee on finance had, in February last year, recommended that each bank disclose the names of its wilful defaulters, with changes to enable this in the relevant laws and regulations.

Name	Amount (in Rs crore)
Surya Vinayak Industries	100
Spanco	85.43
Allied Perfumers	64
Sai InfoSystem (India)	94.91
Khatima Fibres	69.4

Source: Bank of Baroda disclosures website