Suit-filed NPA accounts rise 32% to over R70,000 crore

FE George Mathew | Mumbai | July 21, 2014 1:18 am

The top 10 loan defaulters owe Rs 18,000 crore to the banks, as per the figures collated by the RBI but released by bank unions.

Banks are increasingly taking legal recourse to recover loan defaults. The number of suit-filed bad loan accounts in the banking system has risen by 32 per cent to Rs 70,367 crore by September 2013 from Rs 53,251 crore in the previous year.

Normally a bank files a suit against a defaulter when it exhausts all other means of recovery. One-third of this amount is accounted by willful defaulters.

Moreover, the top 10  loan defaulters owe Rs 18,000 crore to the banks, as per the figures collated by the RBI but released by bank unions.

Kingfisher Airlines tops the list followed by Winsome Diamond and Jewellery, Electrotherm India, Zoom Developers, Sterling Biotech, S Kumars Nationwide, Surya Vinayak Industries and Corporate Ispat Alloys.

“The real problem of the banking sector is the alarming rise in non-performing loans. Since the RBI and the government are not coming forward to release the list of such defaulters, we are publishing the list,” said Vishwas Utagi, vice president, All India Bank Employees Association.

Releasing the default figures, Utagi said 400 companies have bad loan accounts of Rs 70,300 crore (not suit-filed accounts) in 24 PSU banks.

“Bad loans restructured and shown as good loans amounted to Rs 3,25,000 crore. Fresh bad loans in the last seven years were Rs 4,95,000 crore. Bad loans written off in the last 13 years were Rs 2,04,000 crore,” Utagi said.

The RBI and credit information bureaus like CIBIL publish the names of suit-filed accounts. Banks have filed cases against 4085 accounts for recovery of Rs 70,367 crore. The list of non suit-filed accounts is still kept as secret by the banks and the RBI. “Bank depositors have a right to know about defaulters,” he said.

The long-drawn process involved in litigations, remains a cause for worry. It takes several years to recover the dues from such defaulters. However, recovery is virtually impossible from many borrowers who have no assets to show and have siphoned off the money.
The amount stuck as NPAs is enough to meet the capital needs of banks in the new Basel regime.