Reports from TransUnion Cibil’s data have found out that willful loan defaults in India are even higher than the total GDP of 87 countries at Rs 2.4 lakh crore.
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Over the past ten years, the amount that willful defaulters owe Indian banks has increased more than ten-fold, from Rs 23,000 crore on March 31, 2012, to Rs 2.4 lakh crore on May 31, 2022.
Willful defaulters are those who had the ability to repay their loans but decided not to do so, according to the RBI. Willful defaulters also include businesses that spend money for things other than what the loans were intended for.
According to TransUnion Cibil’s data, defaults peaked in March 2021 at around Rs 2.6 lakh crore but have subsequently decreased slightly. The information only relates to accounts where lawsuits against willful defaulters with unpaid balances of at least Rs 25 lakh have been lodged. According to TOI, there were over 12,000 such defaults in India as of May 31st, 2022.
This enormous sum of Rs 2.4 lakh crore is nearly twice as much as the Rs 1.4 lakh crore allocated to the rural development ministry, which funds the rural jobs program under the Mahatma Gandhi National Rural Employment Guarantee Act, and is 2.7 times the allocation of Rs 86,200 crore to the health ministry (MGNREGA).
According to the research, this amount of Rs 2.4 lakh crore is $29.7 billion, which is more than the combined GDP of 87 nations.
Vijay Mallya & Nirav Modi Not The Top Defaulters
Vijay Mallya and Nirav Modi reportedly did not make the list of the top wilful defaulters in India. These include a large number of countries with low GDPs known as tax havens.
The ABG Group, led by Rishi Agarwal and others, is at the top of the list according to RBI data that lists the total amounts owed by people or businesses who had at least one account in which they were in default for Rs 100 crore or more. Willful defaults on the company’s seven loan accounts in various banks total Rs 6,382 crore.
Arvind Dham’s Amtek Auto and its subsidiaries, who have intentional defaults totaling Rs 5,885 crore, are in second place. Third on the list is the Sandesara brothers, Nitin and Chetan, whose company Sterling Global Oil Resources and its subsidiaries have a combined default of Rs 3,757 crore. The brothers have been missing for a number of years.
A total of Rs 2,780 crore has been wilfully missed by Kapil and Dheeraj Wadhawan Dewan Housing Finance (DHFL) and its subsidiaries. Sanjay and Sandeep Jhunjhunwala, whose company Rei Agro has defaulted on Rs 2,602 crore in bank loans, are the next set of brothers on the list.
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 affiliates are further businesses that have defaulted on bank loans totaling more than Rs 2,000 crore. Mehta and Choksi have taken refuge on the Caribbean islands. In total, nine companies have missed loan payments totaling more than Rs 2,000 crore. The following seven on the list have defaults between Rs 1,500 crore and Rs 2,000 crore, according to TOI.
SBI & Maharashtra Top The List
Public sector banks’ (PSBs) books reportedly contained 95 percent of the defaults. More than 30% of these loans are held by the State Bank of India (SBI) and its associates.
The next three banks after SBI are Punjab National Bank (PNB), Union Bank of India (UBI), and Bank of Baroda (BoB), each of which is said to hold more than 10% of the total amount owed.
Maharashtra, the state with the highest GSDP in terms of states, was responsible for 34% of all loan defaults nationwide. With 17.5 percent of the total, Delhi had the second-highest percentage of loan defaults. West Bengal occupied the third position, accounting for 8.8% of all wilful defaults.
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This is a problem in any country, but especially in one which permits offshore banking. The luminaries on this list take their cue from the world’s prominent families and individuals. Color me skeptical that even CBDCs would change either their habits or the supply of “rest homes” for their money. Great reporting!