State-owned UCO Bank has declared Yashovardhan Birla a willful defaulter for failing to pay a Rs 67.65-crore loan taken by Birla Surya Ltd., a company in which the businessman is a director.
Kolkata-based UCO had given Birla Surya a credit limit of ₹100 crore. The company's present balance outstanding is ₹67.65 crore plus unapplied interest from the date it turned into a non-performing asset (NPA) on June 3, 2013.
“Due to non-repayment of dues to the bank, the account was declared NPA on 3 June, 2013. The borrower has not repaid the dues owed to the bank despite several notices. The borrower company and its directors, promoters, guarantors were declared as willful defaulters by the bank and their name reported to the credit information companies for public information," UCO Bank said in a notice.
A person is declared a willful defaulter if he/she defaults in repaying obligations despite having the capacity to repay. Not utilising a loan for the purpose for which it was availed of but was instead diverted for other purposes leads to being tagged as a willful defaulter either.
UCO Bank recently intensified efforts to bring down NPAs to come out of prompt corrective action (PCA), which imposes strict conditions on lending, by Q4 of this financial year.
A K Goel, managing director and chief executive of UCO Bank, had once said that the bank was using every possible, target-driven recovery method to bring down NPA.
“Our net NPA current is 9.72 per cent. To bring this to six per cent, we have given targets to all zones to recover Rs 2,000 crore each quarter at any cost,” Goel had told Business Standard.
Further, top 100 NPA account would be monitored by the MD & CEO and EDs personally, Goel had said.
UCO Bank’s gross NPA, as percentage of total lending, stood at 25 per cent, while net NPA stood at 9.72 per cent in the last quarter for the bank. It had reported a net loss of Rs 4,321.09 crore for the financial year 2018-19.
Interestingly, UCO Bank, formerly United Commercial Bank, was founded in 1943 by Ghanshyam Das Birla. Rameshwar Das, the great grandfather of Yashovardhan Birla, was Ghanshyam Das Birla's brother.