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Wilful Defaulters in State-Run Banks increased by 60% in 5years

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On June 24, 2019, Finance Minister Nirmala Sitharaman stated that the number of wilful defaulters in nationalized banks has risen 60% in five years to March 2019.Wilful DefaultersKey points:

  • Number of wilful defaulters: The figure stood at 8,582 at the end of FY19(fiscal year) against 5,349 at the end of FY15.The silver lining is about Rs.7,600 crore has been recovered from those defaulters.
  • In PSBs (public sector banks), out of 9856 wilful defaulters, 960 accounts from Punjab National bank followed by Union Bank of India and Central Bank Of India.
  • In Private sector banks, Axis Bank reported the maximum number of defaulters.
  • As of March 2019, PSBs filed suits for recovery in 8,121 cases however it recovered about Rs.3.59-lakh crore over four fiscal years (FY16 to FY19).

Measures were taken by the Government

  •  SARFAESI Act,2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest): Action against 6251 cases under the provisions of the SARFAESI Act has been initiated.
  • FIR (First information report): It has been registered in 2915 cases.
  •  ‘4Rs’ strategy (Recognition, Resolution, Recapitalisation, and Reforms,): As per this strategy, gross NPAs(Non-Performing Assets) of PSBs decreased to Rs.8.06-lakh crore at the end of March 2019 against Rs.8.95-lakh crore at the end of March 2018.
  • SEBIs’ action (Securities and Exchange Board of India ): It debars wilful defaulters & companies, from accessing capital markets to raise funds.