Wilful defaults of public sector bank loans rose over 20% to Rs92,000 crore in FY17

The outstanding loans by nearly 9,000 wilful defaulters to public sector banks increased by Rs15,691 crore to Rs92,376 crore at the end of the financial year 2016-17, up 20.4 per cent from Rs76,685 crore at the end of March 2016.

The number of wilful defaulters also increased by nearly 10 per cent to 8,915 at the end of March 2017, from 8,167 at the end of the previous fiscal, according to data collated by the finance ministry.

Out of 8,915 cases of wilful defaults, banks have filed FIR (first information report) in 1,914 cases with outstanding loans of Rs32,484 crore, the finance ministry stated.

The amount of bad loans written off by 27 state-run banks, including SBI and its five associates, during 2016-17 also rose to a five-year high of Rs81,683 crore. The amount was 41-per cent higher compared to the bad loans written off in the previous fiscal.

Of the R81,683 crore written off SBI and its erstwhile associates accounted for Rs27,574 crore of non-performing assets (NPAs) in 2016-17, according to RBI data on bad-loan "write offs" by public sector banks.

SBI merged its five associate banks with itself from April 1 2017.

Gross NPAs of the public sector banks rose to Rs6,41,000 crore at the end of March 2017 from about Rs5,02,000 crore at end-March 2-016.

The RBI had widened the scope for bringing culprits to book by tightening lending norms and making all promoters and directors responsible for loan defaults.

Earlier guidelines prevented banks from proceeding against a nonwhole-time director of a company for wilful default unless there was conclusive evidence that the individual was aware of the wilful default by the company and had not objected to it.

A wilful default occurs when a defaulting borrower doesn't honour an obligation, despite having the capacity to pay, or siphoning off funds and disposing of assets without the knowledge of the bank, according to RBI.

RBI also allowed banks to name and shame wilful defaulters by publish their photographs.