Winsome may get wilful defaulter tag soon

Troubled jewellery exporter Winsome Diamonds, which owes Rs 6,000 crore to a consortium of 15 lenders, may be declared as a "wilful defaulter" soon, a bank official has said.
The Central Bank of India, which has an exposure of Rs 700 crore to the Jatin Mehta-promoted Winsome Diamonds & Jewellery, and another Rs 255 crore to its subsidiary Forever Precious Jewellery, is taking the lead in declaring the troubled company as wilful defaulter.
Confirming the development, a Central Bank official told PTI here today that "Winsome was declared a fraudulent account sometime back, following which we sent out a notice to the company. The notice period got over on May 8. Since the answers were not satisfactory, we are going to declare the company as a wilful defaulter."

"Normally under consortium lending, individual banks take such decision, which is later endorsed by the group of lenders as well. But in this case, we are doing it within this month," the official said.
With Rs 1,800-crore exposure, Punjab National Bank is the leader of the 15-member consortium of lenders, who are mostly state-run banks. The others include Bank of India, Union Bank of India, Canara Bank, Vijaya Bank and IDBI Bank among others.
The official said the due process required to be followed before declaring a company as a wilful defaulter has been completed and a statement on this will come anytime now.

According to the officer, the first step is to ascertain that the company has committed a fraud and if declared a fraud the bank sends it a notice asking for a written explanation. If the company does not provide a satisfactory response, then the bank can declare it a wilful defaulter.
There was no immediate response to an email sent to the city-based company seeking a comment on the issue.
The Reserve Bank defines "wilful defaulter" as the one which has defaulted in meeting its payment or repayment obligations even when it has the capacity to honour the obligations.