The amount owed by wilful defaulters to Indian banks has risen more than 10-fold over the past decade from Rs 23,000 crore on March 31, 2012 to Rs 2.4 lakh crore on May 31 this year.
Data from TransUnion Cibil, a credit-information company, shows that the defaults had increased significantly during the lockdown to touch Rs 2.6 lakh crore in March 2021, but have since come down a little.
The data pertains only to those accounts in which suits have been filed against wilful defaulters with outstanding amounts of Rs 25 lakh or more. As of May 31, there were more than 12,000 such defaults.
The amount of Rs 2.4 lakh crore is 2.7 times the allocation of Rs 86,200 crore to the health ministry and nearly twice as much as the Rs 1.4 lakh crore allocated to the rural development ministry that funds the rural jobs scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
The analysis of the amounts in these 12,000 accounts shows that loans below Rs 1 crore — like those taken by home buyers — account for just over 1% of the total defaults. On the other hand, more than 250 entities that defaulted on more than Rs 100 crore totalled Rs 1.36 lakh crore or 58% of the total wilful defaults.
Amounts like Rs 100 crore make no intuitive sense to most middle-class folks. So, here’s how you could think about it. If you earned enough to be able to save Rs 10 lakh a year, it would take 1,000 years to save this amount. If parked in a Swiss long-term bond (10 years or more), this money would yield an annual interest of Rs 1.15 crore or Rs 9.6 lakh a month. It can buy 200 apartments worth Rs 50 lakh each or more than 190kg of gold, both of which can be passed on for generations.
Have money, won’t pay
According to the Reserve Bank of India (RBI), wilful defaulters are those who default on loans despite having the capacity to repay. Units that divert the funds for purposes other than the specific purpose of the loan also come under this category. Firms that siphon off funds and couldn’t produce the funds or the assets created by using them are also classified as wilful defaulters.
We consolidated the amounts owed by people or companies who had at least one account in which they defaulted for Rs 100 crore or more. Such a consolidation shows that the ABG Group promoted by Rishi Agarwal and others tops this list. The company’s seven loan accounts in different banks add up to Rs 6,382 crore of wilful defaults.
Amtek Auto and its subsidiaries, promoted by Arvind Dham, are second with wilful defaults of Rs 5,885 crore.
Brothers Nitin and Chetan Sandesara, who have been on the run for a few years now, are third with the consolidated default of their company, Sterling Global Oil Resources, and its subsidiaries amounting to Rs 3,757 crore.
The companies of Kapil and Dheeraj Wadhawan — Dewan Housing Finance and its subsidiaries — have wilfully defaulted on Rs 2,780 crore.
Next on the list are yet another set of brothers — Sanjay and Sandeep Jhunjhunwala — whose company Rei Agro has defaulted on Rs 2,602 crore of bank loans.
Other companies that defaulted on more than Rs 2,000 crore of bank loans are Mehul Choksi’s Gitanjali Gems, Sanjay Kumar Sureka’s Concast Steel and Power, Atul Punj’s Punj Lloyd and Jatin Mehta’s Winsome Diamonds and subsidiaries. Choksi and Mehta have fled to the Caribbean islands.
Overall, nine companies have defaulted on more than Rs 2,000 crore of loans. Defaults are between Rs 1,500 crore and Rs 2,000 crore for the next seven.
The famous among them are Shakti Bhog Foods, Sintex Industries, Rotomac Global, Deccan Chronicle Holdings and S Kumars Nationwide.
