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CPM general secretary Sitaram Yechury had on Friday stated in Parliament that the Modi government lacked intention when it came to cracking the whip on wilful defaulters. Yechury substantiated his statement by saying that the conviction rate of willful defaulters has declined under the current government.
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Data available with Credit Bureau Information India Limited (CIBIL) shows that the number of wilful defaulters against whom legal recourse was taken in nationalised banks, State Bank of India (SBI) and its affiliates declined by almost 32% over the last year.
Over a two-and-half-year period since the Modi government assumed power, the number of filed cases against wilful defaulters has fallen by 11%. In June 2014, the figure stood at 4,186. It declined to 3,721 in September 2016.The amount owed by these wilful defaulters was Rs 39,267 crore.
However, this wasn’t always the case. The number of wilful defaulters against whom action was initiated during the first year of the Modi government rose by almost 31% to 5,497.
The situation was similar when UPA was the ruling coalition. In 2009, when UPA-2 was in power, the number stood at 2,213. They owed banks Rs 6755 crore. When UPA-2 was halfway through its tenure, the number of cases filed stood at 3,146. That was an increase of almost 42%.
In 2004, when UPA-1 came to power and Yechury’s CPM was giving the coalition outside support, the number of suit filed cases stood at 1661. During its entire term, the number of wilful defaulters against whom cases were filed increased by 33%.
MoS Finance Jayant Sinha had informed Parliament in the monsoon session that his government had identified 115 cases where connivance of bank officials was found and investigations were underway to fix culpability. That would mean that only 2.7% of all suit filed cases have been put under investigation by the government even as there has been a drastic fall of 32% in the number of willful defaulters against whom legal action has been taken.
This could mean two things: either a massive clean-up of banks' financial statements is underway. The opposition has called this a cover-up. The other reason could be that the Modi government has been more successful than its incumbents at recovering money from willful defaulters. The government has stated in Parliament that it has managed to recover Rs 1,12,078 crore worth of bad loans since 2014. Only time will tell how many of these were from people who wilfully defaulted on loans by gaming the banking system and how much of the money due from wilful defaulters has been written off.
