Large defaulters leave a dent of Rs 29L crorein state-run banks
However, govt claims NPAs of PSBs fell to a historic low of 2.15% last September
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Mumbai: Even as the Government and the Reserve Bank of India claim that Non-Performing Assets (NPAs) of state-owned lenders are at a decade’s low, the latest data on Large Defaulters of PSU banks has reached Rs 29 lakh crore.
For starters, Large Defaulters are borrowers with outstanding dues of Rs 1 crore or more facing civil cases by banks, involving non-repayment, while NPAs are loans overdue for over 90 days, regardless of size. While NPAs may be settled by banks through a one-time settlement or settled under the Insolvency Banking Code (IBC); NPAs are defined by time-based repayment failure, whereas large defaults focus on high-value, high-risk, or wilful negligence.
The Government had informed Parliament last month that gross NPAs as a percentage of total loans and advances of scheduled commercial banks were at a historic low of 2.15 per cent at the end of September. However, there is no clarity on how these figures were arrived at.
According to publicly available data, 11 PSU banks are contesting civil cases in courts across the country to recover Rs 28.93 lakh crore from corporate clients. The biggest defaulters on the list include Anil Ambani and his companies with outstanding dues of Rs 48,282 crore. Data on Large Defaulters until January is available with rating agency TransUnion CIBIL. All PSU banks, except Indian Bank, have uploaded their lists of large defaulters.
Talking to Bizz Buzz, MV Hariharan, ex-treasury head, State Bank of India says, “Poor choice of borrowers. Possibly the residuals after the cherry picking by competitors. Poor collateral management. Lack of supervision, knowledge and oversight. Despite the SMA architecture and processes, regulatory arbitrage seems to be in play.”
All the alphabet soups of NCLT, ARCs, and more seem either toothless or indifferent to the humongous amounts of public money locked up in these cases. This in turn encourages more to default, since the consequences are ‘subjudice’ eternally, he said.
Details of NPAs have been made available only once by the RBI. The central bank was forced to produce the data in a sealed cover to Supreme Court in 2021 in response to a Public Interest Litigation (PIL) filed by former BJP MP, Subramanian Swamy, who sought guidelines for disbursing loans to corporations. The RBI informed the court that accounts classified as NPAs belong to existing customers and banks must maintain privacy norms. The data was never made public.
Swamy also attached the Credit Suisse 2015 report Debt Over Debt to his PIL, which stated that India’s top 10 corporates had crossed NPAs of more than Rs 11 lakh crore. The report listed the Anil Ambani Group, Vedanta, Essar Group, Adani Group, Jaypee Group, JSW Group, GMR Group, Lanco, Videocon Group and GVK Group. Shiva Kumar, former Managing Director, State Bank of Bikaner & Jaipur says, “Health of a bank is judged by capital adequacy and NPA level.
