SBI bears 27% of willful loan defaults, PNB second in line

State Bank of India (SBI), the country's largest lender, accounts for over 27 per cent of the total amount that wilful defaulters owe to public sector banks while the second-largest state-run lender Punjab National Bank comes second in the list with a share of 13 percent of all willful loan defaults.

As of end-March 2017, there were about 1,762 wilful defaulters owing a total of Rs25,104 crore to State Bank of India.

Punjab National Bank (PNB) had about 1,120 wilful defaulters owing it a total of Rs12,278 crore in overdue loans.

The two major lenders accounted for Rs37,382 crore or 40 per cent of the total overdue loans of Rs92,376 crore that willful defaulters owed state-run banks, figures available with the finance ministry showed.

During 2016-17, 27 public sector banks, including SBI and its five associates had written off Rs81,683 crore, up 41 per cent from the previous fiscal and the highest in the last five fiscals.

Even as the government and the Reserve Bank moved to address the issue of non-performing loans of banks, total outstanding loans by wilful defaulters increased by 2014 per cent to Rs92,376 crore at the end of financial year 2016-17, from Rs76,685 crore at the end of last fiscal 2015-16.

The number of willful defaulters across state-run banks also rose nearly 10 per cent year-on-year to 8,915 at the end of March 2017, from 8,167 at the end in the previous fiscal.

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.

Gross NPAs of public sector banks rose to Rs6,41,000 crore at the end of March 2017 as against Rs5,02,000 crore a year ago.

In order to check incidences of wilful default, RBI has tightened the norms and extended promoter responsibility to all directors of a company, including part-time directors.

As per earlier guidelines, a bank could label non-whole-time directors of a company as wilful defaulter only if there was conclusive evidence that the individual was aware of the wilful default by the company and had not objected to it.

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