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Bank loan wilful defaults rise 30% at Rs 4,948 cr

Sarbajeet K Sen

To curb the practice, RBI has said that wilful defaulters would be debarred from accessing the capital market and the banking system would be alerted to ensure that no fresh lending is provided to those identified under the category for a period of five years.

New Delhi, July 9

WILFUL defaulters are quietly gnawing a greater share for themselves out of the banking goldmine despite all the sabre-rattling by lenders to keep them at bay.

Latest figures available with the Reserve Bank of India (RBI) and the Ministry of Finance public sector banks show a nearly 30 per cent increase in wilful defaults, aggregating Rs 4,947.65 crore at the end of March 31, 2003, against Rs 3,886 crore a year ago.

The total number of accounts that has been placed under the `wilful default' category has also shown a substantial increase of 40 per cent from 1,445 to 1,787.

The rise in intentional non-payment of dues has come despite RBI advising banks to take penal action against such defaulters. To curb the practice, the central bank has said that wilful defaulters would be debarred from accessing the capital market while at the same time the banking system would be alerted to ensure that no fresh lending is provided to those identified under the category for a period of five years.

Though the RBI and the Government felt that the threats being held out would have its intended impact of reducing the number of such defaults, the industry-wide figures clearly show that the tendency to take the banking system for a ride has not yet been arrested.

At the individual bank level, the largest bank in the country - State Bank of India - leads the pack by taking a hit of Rs 1,465 crore from 473 wilful defaulters at the end of March 31, 2003. Among the nationalised banks Canara Bank has taken the biggest blow of Rs 356.96 crore, (109 accounts).

The nationalised bank pack is followed by Dena Bank (Rs 298 cr, 69 accounts), Bank of Baroda (Rs 275.82 cr, 91 accounts), Union Bank of India (Rs 235.13 cr, 104 accounts), Punjab National Bank (Rs 197.99 cr, 68 accounts), Central Bank of India (Rs 181.64 cr, 91 accounts), Oriental Bank of Commerce (Rs 147.31 cr, 118 accounts), Indian Overseas Bank (Rs 137.68 cr, 74 accounts), Corporation Bank (Rs 113.69 cr, 58 accounts), United Bank of India (Rs 96.43 cr, 34 accounts), Indian Bank (Rs 71.81 cr, 15 accounts), Syndicate Bank (Rs 48.73 cr, 48 accounts), Vijaya Bank (Rs 38.52, 15 accounts), Uco Bank (Rs 34.86 cr, 30 accounts), Bank of Maharashtra (Rs 31.66 cr, 20 accounts), Punjab and Sind Bank (Rs 16.92 cr, six accounts), Andhra Bank (Rs 5.95 cr, 14 accounts) and Allahabad Bank (Rs 0.81 cr, 50 accounts).

Among the seven associate banks of SBI, following the parent bank is State Bank of Hyderabad (Rs 205 cr, 74 accounts), State Bank of Travancore (Rs 188.77 cr, 30 accounts), State Bank of Patiala (Rs 187.74 cr, 47 accounts), State Bank of Mysore (Rs 141.42 cr, 54 accounts), State Bank of Saurashtra (Rs 99.73 cr, 17 accounts), State Bank of Indore (Rs 67.79 cr, 14 accounts) and State Bank of Bikaner and Jaipur (Rs 19.81 cr, 20 accounts).

Incidentally, the State Bank group accounts for nearly half of the total wilful defaults of the entire public sector banks with a total defaults at the end of March 31, 2003, standing at Rs 2375.26 crore in 729 accounts.

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