Kingfisher leads list of top defaulters

Bank defaulters

All India Bank Employees’ Association (AIBEA), on Tuesday, released the top 406 defaulters against whom banks have initiated legal actions.

These include Kingfisher Airlines (Rs.2,673 crore), Winsome Diamond & Jewellery Co. (Rs.2,660 crore) Electrotherm India (Rs.2,211crore), Zoom Developers Pvt. Ltd. (Rs.1,810 crore), Strerling Bio Tech (Rs.1,732 crore), S. Kumars Nationwide (Rs.1,692 crore), Surya Vinayak Industries (Rs.1,446 crore), Corporate Ispat Alloys (Rs.1,360 crore), Forever Precious Jewellery & Diamonds (Rs.1,254 crore), Sterling Oil Resources (Rs.1,197 crore) and Varun Industries (Rs.1,129 crore).

AIBEA wanted the regulator to publish the list of bank loan defaulters of Rs.1 crore and above, and asked it to consider wilful default of bank loan as a criminal offence.

Further, it also demanded amendment of laws to speed up recovery of bad loans and implementation of stringent measures to recover bad loans.

“As a depositor, public have the right to know the wilful defaulters,” said Vishwas Utagi, Vice President, AIBEA, here, while addressing a press conference. These 406 bad loan accounts are in 24 banks, totalling Rs.70,300 crore as on March 31, 2013.

“Why should the public be deprived of these information on defaults? … The big corporates are getting a chance to loot money… There is a nexus between top bankers and top corporate borrowers, with the support of politicians and bureaucrats,” said Mr. Utagi. He accused the Reserve Bank of India (RBI),the regulator, of not doing enough to get depositors’ money back from the wilful defaulters.

Legal remedies

He said that the non-performing assets (NPAs) of banks were the money fraudulently siphoned off from the banking system.

Mr. Utagi demanded strong legal remedies by the government and the regulators to redeem these public funds. “Banks are dealing with the hard-earned savings of the people, and today the total deposits in banks in India have crossed Rs.75-lakh crore.

“This precious money of the people needs to be safeguarded and guaranteed by proper regulations in banks…. One of the main adverse impact of the de-regulation is the increase in bad loans in banks,” said Mr. Utagi. As on April 18, 2014, bank deposits amounted to Rs.78,69,970 crore and advances Rs.60,36,080 crore.

Our Chennai correspondent writes:

Releasing the list of 406 bad loan accounts amounting to Rs 70,300 crore, the All India Bank Employees’ Association (AIBEA) on Tuesday sought amendment to recovery laws and make “wilful default” a criminal offence.

At a press conference in Chennai, AIBEA general secretary C.H. Venkatachalam said there was a four fold increase in bad loans in the past four years. From Rs 39,030 crore in March 2008, it rose to Rs 1.64 lakh crore by March 2013.

From 2001 to 2013, bad loans that were written off by banks, including private banks and foreign banks, amounted to Rs 2.04 lakh crore, he said alleging that banks were compelled to write-off loans or sanction fresh loans due to political interference.

As the Reserve Bank of India (RBI) and the Central government were not forthcoming in publishing the list of bank loan defaulters, the AIBEA has released the list in public interest, he said.

AIBEA’s campaign that was launched nation-wide on Tuesday stressed on three key points. RBI should periodically publish the list, Centre should amend recovery laws and take criminal action against wilful defaulters.

The association, with five lakh members, will soon publish state-wise list of bank loan defaulters above Rs 1 crore, he said.

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