2,623 wilful defaulters owe Rs 1.96 trillion to Indian banks: Bhagwat Karad

Karad also informed the Lok Sabha that the Centre has written off loans worth over Rs 10 trillion, in the last five years

As of March 31, 2023, 2,623 borrowers have been classified as wilful defaulters in India and they owe Rs 1,96,049 crore to the banks in India, Bhagwat Karad, Minister of State in the Finance Ministry told Lok Sabha on Monday.

Karad said that Scheduled Commercial Banks (SCBs) and All India Financial Institutions report credit information of all borrowers having aggregate exposure of Rs 5 crore and above to the Central Repository of Information on Large Credits (CRILC).

"As reported in CRILC database, as of 31.3.2023, a total of 2,623 unique borrowers were classified as wilful defaulters, with aggregate outstanding of Rs 1,96,049 crore, by SCBs," he said.

Karad also said that banks initiate the action against wilful defaulters under the various recovery mechanisms available. These include filing a case in civil courts or debts recovery Tribunals. Also, they may file cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016.

"Further, as per the Reserve Bank of India's Framework for Compromise Settlements and Technical Write-offs dated 8.6.2023, compromise settlements are undertaken by lenders in respect of wilful defaulters without prejudice to the criminal proceedings underway against such debtors," Karad added.

Loans worth over Rs 10 trillion written off in last 5 years

In response to another question, Karad informed the Lok Sabha that the Centre has written off loans worth over Rs 10 trillion, in the last five years.

Out of the total of Rs 10.57 trillion, Rs 5.5 trillion belongs to large businesses only.

Further citing the RBI data, Karad said that Indian banks have collected an aggregate amount of Rs 5,309.80 crore as penal charges, including penalty charges against delay in payment of loans, during 2022-23.