PSU banks register 1,624 FIRs against wilful defaulters

Public sector banks have filed FIRs in about 22 per cent cases of wilful defaults numbering 7,265 as of September 30, 2015.

As many as 1,624 First Information Reports (FIRs) have been filed with regard to wilful defaults owing money to the tune of Rs 16,601.90 crore, official sources said.

Wilful defaulters owe PSU banks a total of Rs 64,334.59 crore at the end of first half of the current fiscal.

Among the banks, the country's biggest lender, SBI has been one of the slowest in filing FIR by registering only 13 cases amounting to just Rs 13.10 crore.

The bank has identified 1,164 cases of wilful default with outstanding loan amount of Rs 11,705 crore.

In terms of taking legal action, Canara Bank leads the chart by filing 225 FIRs with outstanding amount of Rs 1,031 crore. Bengaluru-based lender has 480 cases of wilful default owing Rs 3,209 crore.

However, Corporation Bank has filed just 4 cases with credit dues of Rs 11.40 crore. These FIRs are against 126 wilful defaulters sitting over loans of Rs 2,356.98 crore.

It is followed by IDBI Bank which has filed 5 cases against wilful defaulters with outstanding amount of Rs 332.76 crore. However, the bank has identified 70 wilful defaulters with loans of Rs 1,982.80 crore.

Wilful defaulters constitute about 20 per cent of the gross non-performing assets (NPAs) of state-owned banks.

Gross NPAs of the public sector banks rose to Rs 3.14 lakh crore at the end of September 2015.

In order to check incidence of wilful 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 could not label a non-whole-time director of a company as a wilful defaulter unless there was conclusive evidence that the individual was aware of the wilful default by the company and had not objected to it.

A wilful default occurs when a defaulting borrower does not honour an obligation, despite having the capacity to pay, or siphoning off funds and disposing of assets without the knowledge of the bank, according to RBI.

As per the guidelines, such borrowers would be liable for action including restricting additional facilities to such defaulters from banks and financial institutions, barring of such borrowers from institutional finance, criminal action, removal of directors from such companies from board and change in management.