8,100 wilful defaulters owe banks over Rs 76k cr

The matter was raised by deputy leader of Opposition in the House Anand Sharma of the Congress who pointed to the vacancies in the debt recovery panels, which are responsible for taking wilful defaulters to task.

Replying to Sharma’s question, Finance Minister Arun Jaitley conceded that Sharma was “perfectly right that the Debt Recovery Tribunals have to be made more effective.” Another Congress member Digvijay Singh expressed concern over the poor conviction rate in such matters which, as per the details provided by the Finance Minister, was just 1.14 per cent during 2015-16.

The Finance minister had earlier said that there are 8,167 wilful defaulters who owe banks a whopping Rs 76,685 crore and 1,724 FIRs had already been filed in 2015-16.  Finance Minister Arun Jaitley also told Rajya Sabha that a Joint Committee of Parliament was presently looking into a Bill relating to debt recovery which aims at empowering banks to take more effective steps in dealing with cases of default.

He said in the Debt Recovery Bill that the Committee was examining, the government had proposed increasing the number of these tribunals. He also said that several notifications on filling up of vacant positions were in the pipeline.

On the charge of low rate of conviction in debt recovery and wilful default cases, Jaitley said that conviction depended on the kind of evidence that investigation agencies were able to produce. 

He said that ‘wilful defaults’ pertained to those cases where someone who has the capacity to pay and does not do so, or where money has been siphoned for a purpose which is not originally intended for.

The Minister said many defaults that banks have been seen pertain to sectors like steel, infrastructure and power and government has worked in the last one and a half years to address problems of these sectors. He said several other measures have been taken to help banks in such situations and added that the insolvency law has also been recently passed.

Last week All-India Bank Employees Association (AIBEA) had threatened to make public the names of top 7,000 wilful corporate loan defaulters who have defrauded around Rs 70,000 crore. The union also demanded filing criminal cases against these defaulters. 

The union had accused the government of going soft on these big defaulters saying, “We believe the government is soft on wilful defaulters. We want to know why no criminal action is taken against them, but only civil suits are being filed against them?”