Despite the Reserve Bank of India instructing the banks to launch legal proceedings, including criminal action against wilful defaulters and promoters in 1,080 cases of wilful default accounts involving an amount of £767.3 million as of September 2016, the banks were yet to take any action in this regard. In response to an RTI query, the RBI said, “the amount outstanding in respect of wilful defaulters of Rs 2500,000 and above pertaining to non-suit filed accounts is £767.36 million as reported by banks and financial institutions to credit information companies as on September 30, 2016.”
This means banks are yet to file criminal charges against 1,080 wilful defaulters who siphoned off funds or are yet pay up despite having the capacity to pay up. The non-suit filed wilful default accounts were £1.24 billion involving 1,654 accounts in September 2014, the RBI said. However, the RBI declined to divulge the top 10 wilful defaulters saying that the matter is in the Supreme Court. “The information requested by you is confidential in nature under the RBI Act 1934. Moreover, in a pending case (Centre for Public Interest Litigation vs Housing and Urban Development Corporation and others), the RBI has submitted to the Supreme Court a list of wilful defaulters of above £50 million in a sealed cover claiming that the said information is confidential in nature and requesting that it may not be revealed to the public,” the RBI said in the reply.
“The matter is still under consideration of the Supreme Court. We are therefore unable to provide the information,” the country’s central bank said. According to Cibil (formerly Credit Information Bureau (India) Ltd), banks and FIs have filed suits against 7,873 wilful default accounts involving an amount of £8.52 billion as of September 2016 as against 6,638 accounts involving £6.38 billion in September 2015. State Bank of India has topped the list with 1,007 suits to recover £1.37 billion. It was followed by Punjab National Bank with suits against 802 borrowers for recovery of £1.01 billion and Central Bank of India 654 accounts for £397 million. “We are vigorously pursuing recovery of stressed assets. With the proposed strengthening of recovery measures, this problem is likely to be tackled,” said an official of a nationalised bank.
The RBI has said there was scope even under the existing legislations to initiate criminal action against wilful defaulters under the provisions of Sections 403 and 415 of the Indian Penal Code (IPC). “Banks are, therefore, advised to seriously and promptly consider initiating criminal action against wilful defaulters or wrong certification by borrowers, wherever considered necessary, based on the facts and circumstances of each case under the above provisions of the IPC to comply with our instructions and the recommendations of JPC,” it said.
