Public sector banks (PSBs) have stepped up legal measures to recover the mounting pile of bad loans. According to data published by the Credit Information Bureau (India) Ltd (CIBIL), as of December 2015, banks and financial institutions had filed over 12,300 cases in respect of loans above ₹1 crore. Defaulters in these cases owed banks about Rs 1.8 lakh crore as of December 2015, more than double the amount in the previous year. Just the top 20 borrowers owe banks about Rs 13,000 crore as of December 2015.
Kingfisher Airlines tops the list of defaulters, owing Rs 1,200 crore (under suit-filed accounts) to SBI, the largest lender. Other big-money defaulters are Hukumchand Mills (Rs 1,169 crore), GET Power (Rs 1,115 crore), Winsome Diamonds and Jewellery (Rs 900 crore), Etisalat DB Telecom (Rs 807 crore) and Forever Precious Jewellery (Rs 747 crore).
Banks take 15 years in some cases to recover their money, and the delay erodes the value of the assets substantially. According to a World Bank report, creditors in India recover only 25 cents to a dollar, compared to 36 cents in China and 80 cents in the US.
The long-drawn process involved in litigation has impeded recovery. Many of the defaulters on CIBIL's list have remained there for the past 2-3 years. Kingfisher Airlines, Etisalat DB Telecom, Deccan Chronicle, Zoom Developers and Electrotherm have been on the list of defaulters since December 2012.
The other big names against whom multiple lenders have filed suits are Winsome Diamonds (which owes a total of about Rs 2,100 crore), Deccan Chronicle (Rs 3,500 crore), Electrotherm (Rs 1,600 crore), REI Agro (Rs 1,590 crore), Surya Pharmaceutical (Rs 1,400 crore), Tulip Telecom (Rs 1,400 crore) and Varun Industries (Rs1,000 crore).
Besides banks, a few financial institutions have also filed cases. LIC, for instance, has filed 70-odd cases against defaulters, who owe it about ₹8,200 crore. Among its top defaulters are Deccan Chronicle, Hamco Mining and Smelting, Punjab Wireless, Tulip Telecom and Padmini Technologies. Specified Undertaking of Unit Trust of India (SUUTI), too, has taken legal action against borrowers who owe it a total of about ₹1,300 crore as of December 2015.
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PSBs step up legal measures to recover bad loans
By IndianMandarins - 2016-04-18 10:02:16
Public sector banks (PSBs) have stepped up legal measures to recover the mounting pile of bad loans. According to data published by the Credit Information Bureau (India) Ltd (CIBIL), as of December 2015, banks and financial institutions had filed over 12,300 cases in respect of loans above ₹1 crore. Defaulters in these cases owed banks about Rs 1.8 lakh crore as of December 2015, more than double the amount in the previous year. Just the top 20 borrowers owe banks about Rs 13,000 crore as of December 2015.
Kingfisher Airlines tops the list of defaulters, owing Rs 1,200 crore (under suit-filed accounts) to SBI, the largest lender. Other big-money defaulters are Hukumchand Mills (Rs 1,169 crore), GET Power (Rs 1,115 crore), Winsome Diamonds and Jewellery (Rs 900 crore), Etisalat DB Telecom (Rs 807 crore) and Forever Precious Jewellery (Rs 747 crore).
Banks take 15 years in some cases to recover their money, and the delay erodes the value of the assets substantially. According to a World Bank report, creditors in India recover only 25 cents to a dollar, compared to 36 cents in China and 80 cents in the US.
The long-drawn process involved in litigation has impeded recovery. Many of the defaulters on CIBIL's list have remained there for the past 2-3 years. Kingfisher Airlines, Etisalat DB Telecom, Deccan Chronicle, Zoom Developers and Electrotherm have been on the list of defaulters since December 2012.
The other big names against whom multiple lenders have filed suits are Winsome Diamonds (which owes a total of about Rs 2,100 crore), Deccan Chronicle (Rs 3,500 crore), Electrotherm (Rs 1,600 crore), REI Agro (Rs 1,590 crore), Surya Pharmaceutical (Rs 1,400 crore), Tulip Telecom (Rs 1,400 crore) and Varun Industries (Rs1,000 crore).
Besides banks, a few financial institutions have also filed cases. LIC, for instance, has filed 70-odd cases against defaulters, who owe it about ₹8,200 crore. Among its top defaulters are Deccan Chronicle, Hamco Mining and Smelting, Punjab Wireless, Tulip Telecom and Padmini Technologies. Specified Undertaking of Unit Trust of India (SUUTI), too, has taken legal action against borrowers who owe it a total of about ₹1,300 crore as of December 2015.
